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Most people scratch their heads when the term "FinTech" is brought up. However, even if you don't realise it, fintech plays a massive role in both our personal and professional day to day lives.
From cryptocurrency to mobile banking, fintech is a vital component of modern life and is set to shape the finance industry's future further.
Today, we look at a beginner's guide to all things FinTech and why you should consider seeking a Master of Financial Technology degree, so read on to find out more!
Whilst it can be a complicated subject, in the simplest of terms, FinTech is the amalgamation of finances and technology, hence the name.
FinTech is an umbrella term for any technology that is utilised to streamline, digitise, augment or disrupt traditional financial services.
The role of FinTech is also to make the delivery of financial services safer, faster and more efficient for both businesses and customers.
From money management and payments to technologies allowing for blockchain and digital banking, FinTech encapsulates a wide variety of things that most of us use on a daily basis.
It's no wonder then that FinTech was an estimated four billion dollar industry by 2020, growing from a 250 million dollar industry in five short years.
Contrary to popular belief, FinTech has actually been around for a very long time. For example, the telegrams and morse codes used in the early 19th century to send money to different locations would have been considered a form of financial technology.
The real rise of FinTech, however, began in the 1950s and 1960s with the introduction of ATM machines and credit cards that made it easier than ever for us to access funds and make purchases.
This was then followed up by electric trading floors in the 1990s and, of course, electronic banking and personal finance apps that we all now use daily.
Cutting costs - One of the primary benefits of FinTech is how it has allowed businesses to cut down on costs significantly.
With better automation, businesses are able to cut down on the number of employees needed to perform automated tasks.
Furthermore, FinTech applications and software insights are able to help streamline businesses and boost operating efficiency.
Greater speed and convenience - Another massive benefit of FinTech is the speed and convenience in which it allows people to make financial transactions.
Some FinTech solutions even allow users to select from a variety of different options, such as express delivery methods that further enhance the speed of the transfer process. A prime example of that is PayPal's "instant transfer" function.
Better security - When it comes to dealing with finances, the highest levels of security is paramount.
Financial institutions are expected to provide customers with the most up to date monetary services that are backed up by the latest security techniques and measures.
Thanks to the advancement of mobile technology, biometric data, digital tokens and data encryption are now utilised to ensure that consumer data is secure.
To illustrate how far FinTech has come, let's look at the introduction of robo advisors. For those who may be unfamiliar with the term, robo advisors are digital platforms that are able to provide users with automated, algorithm-informed financial planning and investment advice with little to no human intervention.
It goes without saying, FinTech is a force to be reckoned with and one that isn't going away anytime soon.
Aside from empowering consumers, FinTech is also incredibly beneficial for the workforce by opening up a multitude of new career options all over the world.