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How Fintech is Shaping the Future of Banking: 5 Crucial Developments

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future of banking

What does the future of banking look like? It’s a fun question to ask, but it’s also an important one. Banking is one of the most profitable businesses in the world, and banks have been innovating and expanding for decades. But now that technology has taken over our lives, it seems inevitable that the banking sector will undergo a series of drastic changes. Here are 5 crucial developments in fintech that will shape the future of banking.

1. Mobile banking

Mobile banking is the most efficient way to make a payment or transfer money. This method uses your phone or tablet to perform banking tasks that would otherwise take you several steps to accomplish. Your mobile device does all the work. All you have to do is enter your card and amount. In the not-too-distant future, financial service companies will use virtual assistants like Alexa, Siri, and Google to give their customers instant answers and guidance. These AI-powered assistants will make it easier to shop, pay bills, and get answers to other pressing financial needs. 

2. Artificial intelligence

Artificial intelligence is a term that is constantly being used by industry analysts and companies as a catch-all for various technologies. But, in many cases, the term gets thrown around too broadly. When talking about AI, we usually talk about deep learning, computer vision, or predictive analytics. These terms may be new, but these technologies are really just algorithms that have already been around for a long time, such as search engines and machine learning programs. But AI is even more fundamental than all of these things put together. AI algorithms are trained by reading millions of user-written instructions and then outputting this data in response to a question. This seems pretty elementary, but it’s actually the first step in learning how to think like a human.

3. Blockchain technology

One technology that has been making waves across the financial services sector is blockchain. But what is blockchain technology? Blockchain is essentially a shared digital ledger, the transfer of data through an open network of users and computers. Originally developed to support bitcoin, blockchain has been adopted as a means to store, transfer and trade just about any type of data. Indeed, blockchain technology is being used to make credit card payments through the ethereum network, digitize gold in an effort to cut costs, and preserve data about refugees. But the technology could change how banks operate in the future. Blockchain is essentially an improved version of the electronic money system known as fiat currency.

4. Digital currencies

It’s possible that the world’s first mainstream digital currency could be launched in just 2-3 years, according to Victor Lee, senior research director at the Mercator Advisory Group. He explains: “Central bankers are convinced that the advent of digital currencies could cause significant disruption to the financial system, and in particular to the traditional payment systems.” Moreover, the prospect of a more ubiquitous digital currency has caught the imagination of financial technology companies that are experimenting with new protocols and use cases for digital currencies. When they mature, digital currencies could be a game changer for a broad range of financial transactions and become a highly relevant technology that changes the way that people send and receive money.

5. Open banking

Though a recently initiated policy, the government-backed Open Banking initiative is aimed at standardizing the banking industry and making it more competitive, especially for companies that work outside of the traditional banking system. Open Banking isn’t just about making banking easier. It also allows businesses to more efficiently utilize existing data. If you use an online bank and its standard policy dictates that you keep financial details private, you have to be very careful when providing account information. But with Open Banking, businesses can tap into a vast database of transactions and know what you bought, where you went, and how much money you owe.

Elena Hudgens is an entrepreneur with 10+ years of experience. She started her journey by building her own e-commerce website on Shopify and turned her $1000 savings to millions in just 2 years. Soon she started different ventures in which she failed and succeeded. And now, she's on a mission to help other entrepreneurs with her life and business lessons.

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Finance

An Inside Look: How Financial Services Regulator Work?

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financial services regulator

The financial services industry is regulated in order to prevent fraud, scams, and unethical behavior. The financial services regulator (also known as a financial regulatory authority) is the financial watchdog who is responsible for regulating the industry in order to protect consumers and businesses. But how do they actually work?

What is the role of the financial services regulator?

The role of the financial services regulator is to work to regulate and ensure the integrity of the industry. This is done in order to prevent any unethical and/or fraudulent activity, and ensure that companies and individuals within the industry operate in a fair, lawful, and ethical way. In the UK, it is the Financial Conduct Authority (FCA) which ensures that the financial services industry operates in a fair, lawful and responsible manner. This means that the FCA works to make sure that the industry is not financially rewarding scam artists, provides protection for consumers when they are being mistreated, and ensures that companies within the financial services industry operate with the same objective of fair and ethical business practices that we all expect.

How does the financial services regulator monitor the financial industry?

The financial regulator works alongside banks, securities companies, insurance companies, and a number of different types of financial institutions, to ensure that companies work for the best interest of their customers. For instance, while the banks are regulated by the Bank of England and the Prudential Regulation Authority, there are various ways that the financial regulator (FR) can monitor and regulate the activities of companies. The bank that issued the bank account may be an official bank, but the security deposit brokers that are located within a bank (also known as branchless or mobile bank agents) are not. In order to be allowed to operate within the banking sector, these agents must therefore be regulated by the FR. 

What are the penalties for breaking the law?

The penalties for breaking the law in the financial sector are quite severe. These sanctions range from regulatory fines to imprisonment, and can take up to 10 years in some jurisdictions. The highest fine for a criminal offence in the UK has been £17m (US$24.3m), so consider yourself warned. Financial crime, in general, isn’t always illegal. However, most of the time, regulators use criminal sanctions to protect consumers. Many startups, including cryptocurrencies, need to adhere to different regulatory requirements.

What is the role of the financial services regulator in the new era of fintech?

The role of the regulator is to be concerned with ensuring that the financial service industry is free from unethical behaviour, fraud, and lack of consumer protection. There are four levels of financial regulatory authorities: Regulators are regulated by the Financial Stability Board. The Bank for International Settlements (the central bank of central banks) regulates member banks. Each country also regulates some or all of its financial services. The SEC regulates securities companies, and regulates stock exchange markets. The CFTC regulates exchanges, clearinghouses, and futures exchanges. The Federal Reserve oversees foreign banks and other financial institutions. The US has a number of financial regulators.

Conclusion

As you can see, there are a lot of challenges for Fintech businesses who wish to operate outside the scope of established financial laws. This is because regulations are in place to ensure that consumers are protected from unscrupulous business practices. While many countries are developing their own Fintech regulatory regime, there is a great deal of variance between different parts of the world. It is therefore recommended that companies engage in thorough research into the market before making any moves to invest in the tech.

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Fintech

The Power of Fintech: How Technology is Transforming the Banking Sector

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There’s a revolution taking place all across the banking industry, and it’s been coined ‘fintech’ or ‘financial technology.’ What is fintech? It’s the wave of new technology that is transforming the way banks operate, how individuals and companies handle their finances, and how money is transferred. Here are just some of the ways fintech is revolutionizing our world.

What is Fintech?

The technology in the financial industry hasn’t changed much in the last 50 years, from writing checks to depositing money. Now though, fintech is revolutionizing the sector. Fintech involves the use of technology to create a better customer experience. For example, with a mobile phone, you have access to more services, a wider network, and can speak with a person in your country or even abroad who can help you with your banking needs. Similarly, digital banking gives people access to more services than ever, including online shopping and instant transfers to another country or an account in another country.

Disrupting the Banking Industry

Let’s start with the banking industry, which has always been reliant on traditional methods. There’s no doubt that you can always count on a bank to help you manage your finances or access your money at the touch of a button, but, for many, that’s no longer good enough. The traditional banking model is under intense pressure and constantly in need of change, and this is driven by technology. As banking evolves, the way we receive our money also changes, and this is where fintech comes into its own. Thanks to the latest innovation in fintech, payments are now instantaneous. Online banking is almost as fast as a postcard; the level of transparency is incredible, with individuals being able to see exactly what is happening with their money, from all angles.

The Rise of New Fintech Companies

At one point, every business in the world needed an accounting department. Today, everyone can do accounting themselves using free online services. That’s the beauty of the fintech revolution: As more industries have been disrupted by technology, new types of financial companies are being created to meet the needs of new customers. You can now get foreign exchange (FX) without going to an international bank. You can book a trip through Travel + Leisure and save money on hotels. Booking apps have been built to meet the needs of the online shopper. Now that every business has an online presence, you can now send a company’s data directly from its website through email, like Evernote. According to Forbes, the fintech market is expected to grow to $46 billion by 2020.

The Future of Fintech

The term ‘fintech’ doesn’t refer to a single idea; instead, it’s a plethora of smart ideas that are being combined and repackaged in innovative ways. To understand the wave of innovation taking place in the banking sector, one must look at fintech as a concept. We first need to define ‘fintech.’ Fintech refers to technological innovation that extends beyond the traditional banking model. At its core, fintech is the amalgamation of technologies that are accessible to any individual and are transforming the way the banking sector operates. This could mean providing services like bitcoin loans and services with a much faster turnaround time than those offered by banks.

Conclusion

Fintech is a phenomenon that many are simply unaware of, and it’s becoming more and more present in all aspects of our lives. Just look at the rise of digital currency, which is changing the way people handle money. This is just the beginning, and you can expect to see more advances in the world of fintech. What steps are you taking to harness the power of fintech?

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Fintech

What is NFT and Why Should You Care?

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NFT

An NFT is a non-fungible token, which means it can’t be interchanged with other similar tokens. It’s a one-of-a-kind. NFTs are a key component of blockchain technology, and they’re going to completely change the way we interact with digital assets.

NFT

What is an NFT?

NFTs are meant to be non-fungible. An NFT will never have two completely identical copies on the blockchain because there is no other possible way to achieve this. Imagine if you had this model of a particular kind of ferrari. It would be impossible for someone to make two of the exact same model of ferrari. If someone made a brand new model of it they could only make one. It couldn’t be identical to the original. The model would be its own singularity. That is an NFT. There are a number of ways of looking at the NFT. You could describe it as “the presence or absence of economic incentive.” This is the most common term used in the industry. Or, you could define it as a “digital asset whose value is attributable to their ability to be controlled by anyone in the world.

What are the benefits of NFTs?

They solve one of the biggest problems with blockchain technology: its lack of anonymity. NFTs create a trustless and immutable network, which protects users by securing data and providing decentralized trust. NFTs use public key cryptography to prove ownership and use. They’re designed to prevent the malicious alteration of the data on the blockchain by entities who don’t really own it. All transactions are reviewed by thousands of independent “miners” in an attempt to prevent double spending and other attacks. The term “non-fungible token” was coined by the creators of Colored Coins, one of the most popular cryptocurrencies out there.

What are the different types of NFTs?

There are three types of NFTs:

  1. Signature-based smart contracts: These are the most common type of blockchain-based NFT. You’ll see them at the heart of many real-world cryptocurrencies, including Bitcoin and Ethereum, but they’re not the only type.
  2. Storage-based smart contracts: These contracts are a popular and popular type of NFT because they can be used to store large amounts of data and power some of the most popular wallets and exchanges.
  3. Public-private key locked smart contracts: It is also known as a multisignature smart contract that is designed to require more than one key to activate. This is useful in trustless environments because it allows you to implement a policy where funds can only be released if a certain number of parties agree.

What is the future of NFT?

Non-fungible tokens are built on the same blockchain technology that powers bitcoin and ethereum. As the industry matures, we’ll likely see an increasing number of ways in which these tokens can be used. The future of non-fungible tokens is going to be very exciting. There are a lot of projects that are trying to solve problems for artists and creators by giving them a way to sell their digital art in a way that can’t be copied. Cryptokitties is one example. But we should keep in mind that such tokens can’t be exchanged for each other and some think that they are a solution to a problem that we don’t have. The problem they’re trying to solve is the fact that you can’t have true ownership of digital assets.

Conclusion

The race for the top cryptocurrency has become more intense than ever before. With so many new ICOs being funded, we expect many to fall by the wayside. While there’s still plenty of room for growth, even those standing at a 4X return have room for improvement. But for anyone still looking to make some serious gains, new altcoins could be just what the doctor ordered. Some, like Tezos and EOS, have legitimate blockchains and high levels of support. Others, like Rootstock, are just duds. Regardless of the outcome, here are the most promising digital asset projects in the current market. As always, cryptocurrency enthusiasts and investors alike are encouraged to do their own research before buying or selling any digital asset. Have you found your perfect cryptocurrency investment?

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