Financial technology companies have brought a revolution in the financial system as it has overcome the drawbacks of the slow traditional financial system. You need not stand in long lines at the bank to make a simple transaction as mobile finance apps have made every financial step automated, which is why billions are being invested in FinTech companies in 2019 alone.
On the other hand, cryptocurrencies and blockchain technology have been picking up especially in the FinTech sector owing to the ease of handling this currency due to no middle-man present. These technologies have influenced the FinTech sector tremendously which we are going to discuss below;
Using Cryptocurrencies in Bank Transactions:
Due to the wide success of bitcoins, many banks are exploring the idea of introducing their own bitcoin into the market due to the benefit of easy transactions using cryptocurrency and also low transaction rates. Cryptocurrency is also cheaper to manage but also gives the financial agencies full control over the monetary policies.
Facebook is planning to launch its own cryptocurrency which is called Libra. JPMorgan has already launched its own cryptocurrency named JPM coin to settle client payments instantaneously at low cost and added security. As more banks plunge into this technology, you can expect easier and faster transactions with low transactional fees.
Simple Money Transfer Process:
The best part of using cryptocurrency is that it makes money transfer more secure and easy to process, especially across the borders as the payments can be streamlined to be safer, faster and cheaper as the transactional fee is almost negligible. The usual money transfer takes time and also the transactional fee is usually high across borders hence due to all the advantages cryptocurrency has over traditional currency, the FinTech sector is diverting its attention towards it.
In fact, due to the cryptocurrency transactions being so simple, bitcoin trading is quite popular owing to the ease of currency deposit and withdrawal. Trading software like bitcoin loophole uses FinTech to trade in bitcoin.
Ease in Identity Verification:
The area where most FinTech companies spend millions of dollars is to detect and eliminate fraud. Identity theft and money laundering are on the rise as hackers are always trying to breach data by bypassing security frameworks.
The best part of using cryptocurrency is that its enhanced security makes it more secure than regular transactions as it uses a distributed ledger that provides a detailed trail of the transactions which cannot be modified by anyone hence the transaction evidence will provide the nature of each transaction.
Using Mobile to Make Payments:
Millions of people are getting access to digital payments owing to cryptocurrency. FinTech apps can be used on mobile phones to make payments in cryptocurrency and these transactions are very secure. This also is convenient as you need not carry physical money or go to the ATM to withdraw some as your phone itself becomes your means to make payments.
Increased Accessibility to Loans:
Drawing loans from the current financial sectors can be a painstaking process and also very expensive owing to the higher interest rates. Whereas blockchain technology makes credit available to customers at a cheaper rate with ease and the entire process being efficient and streamlined due to the involvement of cryptocurrencies
With the technology advancing every second and the development in blockchain technology, there is no doubt that we will see a major change in the way financial decisions are made worldwide.