Financial Technology (i.e. FinTech) is a cross-disciplinary subject that combines Finance, Technology Management and Innovation Management. Financial technology (Fintech) is experiencing rapid growth internationally. Global investment in financial technology increased more than 12,000% from $930 million in 2008 to $121.6 billion in 2020 (KPMG 2021).
FinTech can be advantageous for all sorts of companies, including those in insurance, banking, investments firms, asset management and personal finance management. By leveraging technology to automate tasks, they can deliver the same solutions for a lower price compared to traditional services. Fintech companies use a variety of technologies, including artificial intelligence (AI), big data, robotic process automation (RPA), and blockchain. For examples, AI algorithms can provide insight on customer spending habits, allowing financial institutions to better understand their clients. Big data can predict client investments and market changes in order to create new strategies and portfolios, analyze customer spending habits, improve fraud detection, and create marketing strategies. Chatbots are another AI-driven tool that banks are starting to use to help with customer service.
Fintech solutions have a great potential because they can build ecosystems that feel intuitive and tailored to the user’s needs and promote the development of new banking products and services and the improvement of existing ones.
Further readings and references:
Goldstein, I., Jiang, W., & Karolyi, G. A. (2019). To FinTech and beyond. The Review of Financial Studies, 32(5), 1647-1661.
Puschmann, T. (2017). Fintech. Business & Information Systems Engineering, 59(1), 69-76.
Leong, K., & Sung, A. (2018). FinTech (Financial Technology): what is it and how to use technologies to create business value in fintech way?. International Journal of Innovation, Management and Technology, 9(2), 74-78.
Soldatos, J., & Kyriazis, D. (2022). Big Data and Artificial Intelligence in Digital Finance: Increasing Personalization and Trust in Digital Finance using Big Data and AI.