How is fintech transforming the role of global finance?
The fintech sector is making global news every day. New initiatives and innovations, from technology to advanced financial processes, stock and commodity trading, and more are the currency of this transformation.
Funding for fintech has grown globally by 45% in the last few years, a meaningful indicator of the significance of fintech in global terms.
The rise of fintech
Fintech as we now know it is the direct result of the digital revolution. This is a very new class of financial technology and the practical applications of technology. From very basic beginnings like digital accountancy software, fintech has become the new frontier for business, capital, and investment.
Fintech is the direct result of demand for improved services, better integration of banking, credit, and finance, and practical efficiencies for global trade. These are the evolutionary forces which have created fintech, which is effectively a whole new sector in global business.
Global core business and fintech
The fintech sector is powering ahead across the board in fundamental global trade. Big advances have been made in a very wide range of sectors:
- The credit market: Lending and borrowing are greatly facilitated by new fintech technologies and practices. The global credit market has grown exponentially, providing borrowers and lenders with a much wider and far more flexible range of choices.
- Accountancy: Modern accountancy is now very different from old-style accountancy. Digital systems, better analytics, low-cost automatic processing and a much broader range of accounts management solutions are contributing to this process. This fintech-based type of accountancy has effectively remodelled the accountancy profession. Already, accountancy qualifications are adapting to the new fintech environment. Crush the CPA Exam covers a range of options in the profession, read more here to learn about the different accounting certifications.
- Stock market and commodity trading: Perhaps nowhere is the impact of new fintech’s more obvious than in these markets. Automated trading, margin management, and even early forms of artificial intelligence market analysis have been adopted worldwide in all major stock, futures and commodity markets.
- Banking and investment: Advances in fintech have created new opportunities for banks and investors on a colossal scale. Most modern investments, like hedge funds, private banking, private equity, and similar high-value financial models have benefited greatly from the efficiency and very broad range of new fintech entering the markets.
- Basic business efficiencies: The fintech sector has also been a primary mover in streamlining and reducing the cost of doing business. Modern business systems and software are the true grassroots of frontline fintech, integrated into the broader global markets in every sector of business.
- Blockchains and cryptocurrencies: Blockchain and cryptocurrencies are the product of advanced new fintech. Blockchain is now being introduced around the world in various forms, including such exotic transactions as royalty payments for media products, and other baseline transactions. For example, OmiseGo, are creating a platform which provides interoperability between various payment systems like Paypal, Visa and Apple Pay.
- Online business: Simply buying and selling online would not be possible without fintech. The fintech sector has created this market and is largely responsible for developing the technologies which support it. Everything from basic buying and selling to advanced financial trading is based on fintech.
Fintech and the future
Global finance and fintech are now inseparable. The future of global finance will be based largely on new fintech initiatives and technological developments. Emerging fintech is already giving indications of major transformation in many markets:
- Artificial intelligence: The current generation of artificial intelligence is very much a work in progress. Artificial intelligence technologies may include highly specialised fintech, custom-built for specific roles. One of the reasons for the gigantic increase in investment in fintech is the obvious capacity of artificial intelligence team manage Big Data very efficiently. That’s exactly what the global finance market needs, so you can expect major developments in this area.
- Algorithmic trading: Algorithms have already made their debut in the major financial markets; however, this is very much an ongoing process. New fintech algorithmic trading is likely to be highly diversified, accessing and analysing data across all global markets.
- Automated trading: Automated trading is likely to affect the banking and financial sectors on a very fundamental level. This form of fintech is applicable to all areas of banking, credit markets, property markets, and other mainstream traditional markets.
- Personal finance: On the personal business level, new fintech is already drastically streamlining personal finance options. This type of fintech will give consumers access to all types of financial products, services, and more.
Fintech is the future
Fintech and its impact on global finance have just begun. The future is here, and there’s a lot more fintech to come. Watch this market, because there are many more opportunities and new horizons emerging.