Table of contentsIntroductionBackgroundImpact of FintechFintech in bankingBig Data and risk assessmentSecurity and customer experienceDigitalization of transactionsNext generation products and servicesSubstantial change in human resourcesFintech in BangladeshFindingsReferencesIntroductionThe term “fintech” It happens to be an amalgamation of the two words “financial” and “technology” which are used to describe any technology used to provide financial services to end consumers and businesses. Thus, fintech applications range from mobile banking and insurance to cryptocurrency and investment applications. Broadly speaking, fintech involves the use of any entity to perform or connect to desired financial services through the Internet, thereby allowing the user to participate in transactions such as money transfer, lending, loan management and investment. A concrete example of fintech would be applications like PayPal or Venmo through which many of our daily transactions are carried out, from paying salaries to a simple occasional purchase at a grocery store. Fintech has integrated itself into our lives without us even realizing how dependent we have become on it. It is quite difficult to imagine that fintech allows a user to open a bank account on the Internet, without having to be physically present in a bank and even allows users to use their phone as a "digital wallet" to carry out our transactions. operations. monetary transactions. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essayAt present, i.e. globally, emerging fintech technologies would include artificial intelligence (AI) and big data. AI for the fintech industry would be used to predict changes in the stock market and provide insight into the economy, allowing companies to better understand and serve their customers. Then, Big Data, aimed at the financial sector, is also used to predict customer investments and market changes and create new strategies and portfolios. It also allows businesses to analyze and mitigate risks on their future investments through its Big Data analysis. Like any technology, fintech has some drawbacks, such as how it presents potential threats to traditional methods of financial marketing. There are concerns about how it might replace old ways, but we simply cannot ignore the possibilities of what the integration of fintech would reveal to its users.BackgroundTo better understand fintech, it is essential to know its history. According to an article by Arneris, Barberis & Ross, key periods in the fintech timeline are divided into three broad timelines. The first era is between 1886 and 1967, because that is when the rapid transmission of financial information began. It was also during this time that we first received transatlantic cable and Fedwire in the United States as well as credit card technology. The second era spans from 1967 to 2008, where we learned about ATMs, the digital stock market, online banking, and early e-commerce business models. The third era encompasses our current era, from 2008 to today, where the public mindset has shifted from traditional financing methods to a more digital approach. We attended the launch of theBitcoin, which happens to be a cryptocurrency, and has had a major impact on global financial markets. We have also seen an increase in reliance on digital payments through apps like Google Wallet and Apple Pay whose growth has been enabled by the massive influx of smartphone usage. Today, according to the 2017 Fintech Adaptation Index, the countries with the highest level of Fintech uses are China (69%) and India (52%). China, India and other emerging markets never had time to develop a Western-level physical banking infrastructure, making them more open to new solutions. In the case of China, fintech penetration is well above the global average adoption (33%) as well as that of the average adoption in emerging markets (46%). In the context of Bangladesh, banking sector services that incorporate intensive use of fintech have not yet started, but there are other forms of its implementation. Mobile phone apps such as Bkash, Rocket and Upay allow users to exchange currencies more smoothly without the need for cash. The apps allow users to be more efficient and also provide them with security as they do not have to carry cash. Overall, the uses of fintech in Bangladesh are still in their early stages, but we can very clearly imagine it growing into a much more widely used platform. The impact of FintechFintech has enabled companies with low-cost means to offer practical, personalized solutions and intuitive data products and services. Fintech has also lowered the barriers to entry for new businesses, as well as established financial institutions, to join the evolving sector and thus resulted in a complex network of cooperative competition. There are four categories of Fintech users: 1) B2B for banks and 2) their professional customers, 3) B2C for small businesses and 4) consumers. Trends in mobile banking, increased knowledge, data, and more reliable access analytics and decentralization will create opportunities for all four groups to engage in ways previously unimaginable. Younger consumers are more aware of fintech and tend to be the most active users of fintech. The fact is that customer-facing fintech is primarily aimed at millennials, as this segment has a huge size and rapidly increasing earning potential. Many fintech observers believe that millennials are fintech's primary target due to the size of the market rather than their interests and abilities. Therefore, fintech can do little to meet the needs of the older generation since their problems are not being addressed properly. Before the advent and adoption of fintech, a startup or business owner had to physically visit banks to seek funds and establish infrastructure, such as a landline. connected card reader and relationship with the credit card provider if they intended to accept credit card payments. Now, fintech has made these processes easier and hassle-free for them. Fintech in banking Fintech is gradually changing the shape of the global financial system. With the collaboration of fintech startups and traditional institutions, things like P2P lending at your fingertips, crowdfunding, cryptocurrency payments, and automated financial advisors have evolved over time. At the beginning, theFintech startups and traditional financial banks were rivals and competed to attract customers. But things have changed now. They both now work hand in hand due to the disruption in financial services caused by fintech. Together, they are now able to provide their customers and businesses with better customer service, greater financial security, more opportunities, and more. Big Data and Risk Assessment Big Data refers to the massive volumes of electronically stored structured and unstructured data sets that can be analyzed and used. to reveal trends and patterns related to human behavior. Big Data is used in fintech to provide better personalized financial services and products for existing and potential new customers. Advanced technologies such as the deployment of artificial intelligence and machine learning algorithms can detect fraudulent transactions by identifying unusual user activities based on their behavior patterns. Security and customer experience Another impact of fintech on banks is changes in the protection of personal data and the customer experience of customers. Since fintech primarily relies on digital and mobile applications, the risks of data breaches have increased in recent years. This is why fintech companies are investing more in their cybersecurity infrastructures and cloud services to ensure better customer experiences through advanced techniques to detect automated attacks on personal data and digital wallets. Digitization of Transactions The volume of mobile payments has increased significantly in recent years; thanks to fintech. Despite the ease of access to 24/7 transactions, some customers still prefer traditional banking services. These digital transactions are now more innovative and will also attract these conservative customers. Fintech has enabled omnichannel banking allowing users to transact across web platforms, apps and social media. Fintech has also reduced transaction fees, improved transparency and reduced the risk of error. Next-generation products and services Banks are adopting innovative technologies to offer more innovative products and services to their customers, such as the following: Digital-only banks with no physical location. existence and only provides digital services. Joint current accounts that handle different currencies, card types and user categories allowing customers to track their spending and manage their savings. Voice and facial recognition techniques are applied to provide access to and maintain user accounts. secure against unauthorized access. Augmented reality/virtual reality (AR/VR) gives financial institutions an edge over their competitors by providing their customers with a three-dimensional experience. banks, but also led to significant changes in their human resources. Now, banks and other financial institutions are hiring employees with skills and expertise in both finance and technology. This has opened new doors for young people to choose the career path best suited to their interests and skills. Positions such as cybersecurity analyst, data scientist, product manager, compliance expert, etc. are gaining popularity as a career choice for young people. ThereFintech has also made it easier for the younger generation to choose career paths that will interest them in the years to come. This has also prompted companies to invest more in their human resources to develop technical expertise by providing training to existing staff, organizing educational events, etc. Fintech in BangladeshFintech is renovating financial services for businesses and consumers not only across the world. world but also in Bangladesh. Bangladesh has embraced fintech and ventured into emerging markets. There was a large unbanked population in Bangladesh who were not part of the modern financial sector. Fintech has managed to change this scenario. The Bangladesh government has been working tirelessly on the 'Digital Bangladesh Vision' which has four key elements: human resource development, people's participation, civil services and use of technology in business. With the use of technology in businesses being a crucial part of the vision, Fintech has played an important role in achieving this. One of the fintech platforms is mobile financial services (MFS), which has achieved the most remarkable improvement over the years by financially including 47% of the population. Now, these people have convenient and cheap access to financial products and services such as transactions, payments, savings, credit and insurance. Financial services like microfinance institutions (MFIs) create new opportunities to bring the rest of the population under the umbrella of financial institutions. services. MFIs are the primary means by which 90% of Asia's 180 million poor households can be financially included. Since these people cannot afford high transaction and loan repayment costs, MFIs can provide a cheaper route to financial inclusion for them. In Bangladesh, MFIs have contributed to greater financial inclusion, but their growth has stagnated over the past two years following the advent of agent banking. Even if social inclusion is not the priority of MFIs, they still offer customers savings offers as well as technological support. MFIs in Bangladesh have a huge customer database that they can use to harness the potential of fintech. The MFS industry has not been able to unleash its true growth capacity due to its lending limitations. This indicates a growth opportunity for MFIs to merge with MFSs to enter an untapped market. Keep in mind: this is just a sample. Get a personalized article from our expert writers now. Get a Custom Essay Results Fintech is often described as a negative force that threatens the traditional banking system. The idea that fintech is transforming the way individuals and businesses connect to their banks, as well as how banks manage their back-office operations, remains a widely held idea. However, as François de Maricourt, Managing Director of HSBC Bangladesh, said, fintech, rather than threatening, actually complements banking institutions. Fintech innovation represents an evolution rather than a revolution in traditional banking. It is understandable that since the global financial crisis of 2007-2008, regulation has constantly evolved and become more complex. But the goal of financial technology is only to make financial services more efficient, so that customers can benefit from improved services>.