- Fintech innovations streamline financial processes, making them more efficient and convenient for consumers and businesses.
- By leveraging technology, fintech companies can significantly reduce the costs associated with traditional financial services.
- One key area of the significant impact of fintech advances is bridging the gap between traditional and digital markets.
OUR TAKE
As the internet finance wave surges forward, many people might wonder how fintech can impact our daily lives. After all, aren’t our lives about food, clothing, shelter, and transportation? In fact, fintech is deeply intertwined with our daily necessities, even in the most mundane aspects.
–Miurio Huang, BTW reporter
Fintech, short for financial technology. With the continuous development of artificial intelligence, financial enterprises use science and technology to make their services more efficient, thus forming an economic industry. Fintech has the potential to positively impact the world in several ways.
Streamline financial processes
Fintech innovations streamline financial processes, making them more efficient and convenient for consumers and businesses.
It can provide banking and financial services to underserved populations who previously had limited access to traditional banking systems. Through mobile banking, digital wallets, and microfinance platforms, fintech can empower individuals and businesses in remote or underdeveloped areas to access essential financial services, manage their finances, and participate in the formal economy. Fintech lending platforms, crowdfunding platforms, and alternative credit scoring models enable small and medium-sized enterprises (SMEs) to access capital more easily. By connecting borrowers with a diverse pool of investors and utilising alternative data sources for credit assessment, fintech companies can address the funding gap faced by many SMEs, fueling entrepreneurship and economic growth.
Also, digital payments, online banking, peer-to-peer lending, and robot-advisors can reduce the need for physical infrastructure and paperwork, saving time and resources for both providers and users.
Risk management and fraud
By leveraging technology, fintech companies can significantly reduce the costs associated with traditional financial services. This can lead to lower transaction fees, reduced overhead costs, and more competitive pricing for consumers. Lower costs make financial services more accessible and affordable for a broader range of individuals and businesses and reduce investment risks.
Meanwhile, Fintech solutions utilise advanced analytics, artificial intelligence, and machine learning algorithms to enhance risk management and detect fraudulent activities in real-time. This not only protects consumers and businesses from financial losses but also increases trust and confidence in digital financial transactions.
Change the way of trade
One key area of the significant impact of fintech advances is bridging the gap between traditional and digital markets. A platform that combines the trading of goods and assets, such as gold, silver and other precious metals, with blockchain-based asset trading provides unique opportunities for investors at different levels of expertise.
This has a significant impact on commodities traded in traditional markets including financial derivatives. Since most traders and investors are still used to traditional trading mechanisms, digital platforms must provide convenient entry-level services so that these technology-driven solutions can be favored.
“These digital platforms give traditional investors a chance to have a soft landing as they come to our platforms and start trading assets they are already familiar with,” said Jonathan Caras, head of Levana Protocol Communications, a perpetual contract exchange on the Cosmos network. “Over time, they began to become familiar with more advanced fintech products and derivatives.”
To ensure that all transactions and positions have sufficient collateral, Levana and others have adopted a fully funded mechanism. While closely related to the concept of full mortgage, the well-funded approach has a broader perspective that not only ensures transaction security, but also emphasises the overall financial health and stability of the platform. Therefore, the solvency of the platform can be maintained even in the case of high performance pressure or liquidation.
Caras Believe that the ability to trade in the form of digital realistic assets will be the key to attracting institutional traders and investors. Institutions come when more real-world assets can be traded unconfidence on the chain through permanent swaps, futures and options contracts. Levana Support multiple RWA, such as gold, silver, euro and sterling.
Financial literacy and education:
Fintech platforms can play a vital role in promoting financial literacy and education. Through personalised financial management tools, educational resources, and gamification techniques, fintech companies can empower users to make informed financial decisions, plan for the future, and improve their overall financial well-being.
