Traditional banking methods move slowly and leave much to be desired by way of customer service. Until the emergence of modern Financial Technology (FinTech) start-up culture, however, consumers had few to no other choices. Modern technologies such as blockchain technology and peer-to-peer protocols, however, are paving the way for a user-focused economy.

 

User focus in this context not only refers to a focus on user wants, but also on allowing consumers to help and monitor each other.

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Blockchain

 

Blockchain technology, most commonly known for being the technology behind bitcoin services the finance sector by allowing for nearly instant transactions, innate fraud resistance, and network interoperability. Blockchain networks can be permissioned to restrict access to sensitive information such as personal information or other personally identifiable information (PII).

 

Blockchain technology can be used outside of just PII and expand into securing the information required to organize and analyze expanding markets. By relying on distributed computing and blockchain technology, markets can avoid having their data eliminated by a malicious attack or natural disaster as well as quick communication in the event of an emergency.

 

Blockchain networks such as HyperLedger and Ethereum are being evaluated for enterprise and potentially government applications.

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Peer-to-peer (P2P) services

 

P2P services allow users to evaluate risks and invest their funds in others without having to rely on banks for lending and insurance companies for insurance. This sharing economy is driving modern generations to become self-reliant and to help others around them based on calculated risk and reward evaluations.

 

By placing decision-making power in the hands of the market, it is possible to lower barriers to entry and help drive competition, resulting in a more optimal market for consumers to benefit while advancing technology at an increasing rate.

 

P2P services can be used for virtually any application where an individual needs money and another is looking to invest theirs. Some peer-to-peer services include SoFi for student lending and other P2P lending as well as sites like besure, a small item P2P insurance provider.

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Cryptocurrency

Cryptocurrency is similar in many ways to traditional, fiat currency as well as precious metals and gemstones. Cryptocurrency can be used to make payments of any size, and is normally used to secure public blockchain networks against attack–think bitcoin and ether. By giving the network a method of paying for services, the network becomes naturally secured by its community.

 

Cryptocurrencies are currently facing resistance to becoming mainstream currencies due to regulations or lack thereof by multiple national governments. While cryptocurrencies are becoming increasingly regulated by the surrounding markets, global understanding is still not high enough to allow for global adoption.

 

The Japanese government, however, recognizes bitcoin as a legitimate payment method. The transition for Japan began on April 1, 2017.

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Cross-Border payments

 

Cross-border payments have long been reliant on banking systems and legacy computing networks. With the rise of FinTech in the modern payments sector, however, competition is cropping up consistently. One such competitor is SendWyre.com.

 

SendWyre is a FinTech startup that claims to send international payments at the speed of email, versus the 2-5 business day timeline of the SWIFT Network which has recently been found to have been compromised by U.S. Intelligence agencies.

 

The exchange of money between countries has always been a tedious and time-consuming affair, but with companies like SendWyre breaking into the sector, cross-border payments are becoming much faster.

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Artificial intelligence

 

Artificial intelligence is becoming increasingly prevalent within the FinTech ecosystem. New areas of investing and payment processing that make use of AI are becoming new focal points for funding. Some such areas include robo-advising, AI-based investing, AI-based market prediction, or even betting outcomes.

 

Some such companies operating in FinTech artificial intelligence include Betterment, OhMyBet, and Responsive.ai.

 

While Financial technology is not necessarily the newest field, its technologies are beginning to approach mainstream acceptance and truly reach fruition with impact on their target markets. Once these technologies reach full-fledged adoption, costs of operation for banks, businesses, and governments will likely decrease significantly as a result.