FinTech, basically Finance + Technology is an entire industry simplifying life for us. From paying bills to borrowing a loan everything can be done online. For understanding these better let us understand this through the different sectors that have changed thanks to fintech:
1. Lending: Traditionally people do this through banks. They deposit their money in banks and get interests for those deposits. Banks then lend this money to other people (in the form of loans) at higher rates. But this is a long procedure and a lot of documentation is needed for borrowing loans from banks.
With fintech this lending has become much more convenient. Here’s how:
- Peer to Peer Lending Platforms: If people want to borrow money for business or personal needs it can be done online through these platforms. The process is less tedious and lesser documentation is required than banks. In the case of business loans, few companies offer collateral-free loans as well. For Personal Loans you can visit Qbera For Business Loans you can visit Capital Float or FlexiLoans
- Crowdfunding: This is the concept of raising money for a project or venture through a large crowd of people, typically the internet. People submit their idea online and allow other people to contribute small amounts to the project in exchange for equity or the product. Some of the products we use today are actually crowdfunded. Example: The Fidget Cube.
2. Payments: Traditionally payments are done using cash or cheques, but there is always the constant fear of being robbed, defrauded or losing it.
With fintech this has changed. Here’s how:
People can use netbanking, mobile banking, mobile wallets, aadhaar enabled payments, etc. for making payments and for receiving money from anywhere in the country or even the world. This is a much secure and safe method instead of using physical cash.
3. Currencies: All major currencies – the Dollar, the Euro, the Yen, etc are under the control of a government and a central bank, which issues money and regulates its usage.
But with Fintech it is possible to use cryptocurrencies like Bitcoins:
Cryptocurrencies like Bitcoins are a virtual currency allowing people to anonymously send and receive money across the internet. It is not backed by any country’s central bank or government.
4. Financial Management: Traditionally this is done by hiring experts on finance and taking their advice on managing money.
But now with fintech, this can be done through apps free of cost:
These include all money management apps and websites that are useful for people especially those without a financial background. Through these apps, you can manage your bank accounts, manage your budget, calculate your taxes and manage everything finance related. Read: Money Management Apps.
This way fintech makes transferring money, paying bills, obtaining loans, buying movie tickets or simply storing cash in an e-wallet so much easier. If you know any fintech company that has helped you in your daily life, let us know.