Fintech is a trending term in the financial world today. It involves the use of technology to develop solutions in the financial and banking sector. Believe it or not, fintech has been adopted by the entire world, which further drives innovation.
Blockchain technology is also a type of fintech that is highly sophisticated. It was invented as a solution for cryptocurrency, which is a form of digital currency that is changing world financial transactions by storm. Blockchain uses a distributed ledger where any changes are visible to everyone and they can hardly be reversed.
These two technologies are game changers in the financial sector, especially traditional banking. Basically, banks are custodians of money deposited by their clients. They also invest some of the money through various projects and issue loans where they earn interest. Today, banks have adopted fintech and blockchain technologies to better their services. To understand more about blockchain and cryptocurrency in general, visit https://nakitcoins.com/. For now, let us see how these work.
Fintech Technology in Banks
- Use of apps – the use of apps to manage finances is increasingly popular these days. Fintech companies are behind this solution through their innovative ideas. Banks have already adopted this technology where their customers can check balances, ask for loans, and even send money to other people through a mobile app. This has indeed increased convenience in how they offer services.
- Mobile payment – although this technology is often used by independent financial institutions, banks have joined the trend to stay in business. Mobile payment is used in developed and developing countries. Some are quite elaborate and are used as banks where people can save up to a certain limit. Most of these are financed by banks.
- Budget apps – people have become too busy to track their incomes and expenses. But banks have now adopted the technology of using apps to make budgets and even manage people’s finances. So, it is time to talk to your bank to learn if they have this in place. They can detect your income and payments that are drawn from your account. You will be able to view your financial information at any time.
Blockchain Technology in Banking
Essentially, banks have adopted two concepts: distributed or shared ledgers and cryptography. Initially, banks would use documents that could only be changed by one person, and the changes file would be emailed to others for them to view the changes. Today, this is long gone because there are shared ledgers where authorized people can make changes in real time and all other collaborators can see these changes.
Likewise, cryptography has increased secure communication in the banking sector. Probably, you have not heard of many cases of security issues with banks. This is because they have secure technology to ensure data integrity at all times.
As you can see, fintech and blockchain technologies have indeed revolutionized the traditional banking sector in an excellent way. It is anticipated that more changes will be seen in the future to make banking convenient, fast, and secure.