4 Categories of FinTech uses

-Business to business for bank
-Business to business for bank client
-Business to client for small business
-Business to client for consumer

Innovation on FinTech

-Mobile and electronic payment systems are rapidly increasing all over the world

Example of FinTech

-A payment application like Venmo has provided a “free digital wallet” to the mobile device by allowing friends to connect swiftly and security via Facebook to request and send money to each other in few clicks on their phone.

-A traditional method of pay is disrupted by platform such as ApplePay and Bitcoin.

-To save on international transfer fees, individual use money transfer services such as TransferWise when sending money to abroad.

-CreditKarma offer credit risk services at zero or low cost.

Disadvantages of FinTech

Fintech also have a disadvantage such as:

- Services was not security, or trust, or lack of technical knowhow

- Enormous operating cost stemming from multi-layered management structures and large offices in prime locations. High overhead costs means they have a hard time competing with flexible technology companies focusing on specialty areas and lower cost of operation.

- Some firm are part of a highly regulated industry. While regulations are necessary, they affect the banks’ agility, innovativeness and ability to compete effectively. This has led to an industry where the major players offer more or less comparable services at more or less comparable (and high) prices.

-The ease of making and receiving payments has set the tone for far greater disruption of the banking industry:

Benefit of FinTech

There are some benefit of FinTech such as:

-the emerging payment of technology has made consumer spending and all other forms of payment easier, faster and more secure

-Fintech provide consumer with more personalized and comprehensive service online

-Fintech will help drive the democratization of the tools and financial services, fees of wealth management and philanthropy

-Giving consumer a lot of option in the basic aspect of financial services including banking, investing, borrowing and saving

-Having a positive impact on society by increasing competition

FinTech Category Innovation Quadrant

There are four category of quadrant to differentiate FinTech and how they compare with one another by provide a snapshot of the average funding and average age.

1.     Heavyweights

These categories have high average funding and high average ages because of this category are comprised of companies that have reached maturity with significant financing.

2.     Established

These categories have low average funding and high average ages because of these categories are comprised of companies that have reached maturity with less financing.

3.     Disruptors

These categories content high average and low average age. They have

less mature with significant financing.

4.     Pioneers

These categories have low average funding and low average ages because of these categories are comprised of companies that are less mature with earlier stages of financing.

            

What is Financial Technology?

Financial Technology or Fintech in simple term is any technological innovation in any factor. Other than that, fintech also is an industry consists of companies that use new technology and innovation to disrupt the marketplace of traditional financial institutions and intermediaries in the delivery of financial services by trying to replace or enhance the usage of financial services of incumbent companies. 

FinTech affect the entire financial services industry. Financial services is almost entirely changed the nature of each financial activities of banks for payment to wealth management. Financial technology will disruptive to financial services. The basic conflict will occur between the old firms and new firms about financial services process from top to bottom and incumbent financial services firms are trying to keep up with new products of their own. Traditional banks and financial services firms are spending greatly in innovation, but leveraging their investment is hard with so much invested in legacy systems and profit centers. Other than that, new business starts struggling to navigate a rapidly changing regulatory landscape and need to increase the amount rapidly with limited resources. Blockchain technology appears to overhaul financial services by banks and startups. This technology can stores and records Bitcoin transactions and reduce the cost of financial activity to virtually zero and remove a lot of the traditional banking activities.