What is FinTech in Banking? How Does It Impact Our Everyday Lives?

FinTech has revolutionized everyday banking and made it more accessible, convenient, and hassle-free for people. But while you might have heard the term 'FinTech,' have you ever wondered what is FinTech? What is it’s impact on the banking sector? Let’s find out-

What is FinTech?

FinTech (Financial Technology), an umbrella term, refers to mobile applications, software, platforms, and related technologies that automate, enhance, or modify traditional banking and finance. From simple payment apps we use every day to encrypted transactions on complex blockchains, FinTech is steadily reshaping the existing banking ecosystem. FinTech in India is one of the fastest-growing industries due to the thriving start-up ecosystem.

How FinTech Started & How Does It Work?

While the term FinTech gained prominence in the last few years, its foundation was laid decades ago. As for the working, FinTech products and services aim at simplifying banking transactions and making them more cost-effective and accessible. For instance, with a UPI Payment App, you can directly send money to someone’s bank account. 

What is FinTech Banking?

The digital wave in the Indian banking sector has significantly contributed to the extensive growth of FinTech in the country. Leading banks like AU Small Finance Bank have upgraded their operations and adopted the latest financial technologies to revolutionize the banking experience.

How Has Fintech Changed the Banking Sector?

FinTech technology in banking has resulted in the creation of several innovative products and services. Some of the noteworthy mentions are -

• Smart Chip Technology

ATM and Debit Cards feature smart chips embedded with EMV technology. The microprocessor chip encrypts card credentials, allowing users to securely and conveniently withdraw money at ATMs and make offline payments.

• Biometric Sensors

The latest in ATM technology is the use of biometric sensors. The ATM machines embedded with this technology eliminate the need for the users to carry their ATM or Debit Card or even remember their card PIN.

• Online Transactions

With NetBanking, bank account holders can make online fund transfers through IMPS, NEFT, and RTGS from the comforts of their homes.

• Omni-Channel and Branchless Banking

Online banking channels such as NetBanking, Mobile Banking, and Video Banking have reduced our reliance on physical branches and made branchless banking a reality. With FinTech, almost all banking and non-banking transactions can now be performed without visiting the bank.

• Customer Service Chatbots

Leading banks also deploy customer service chatbots to provide faster services to customers. For instance, AU Small Finance Bank has introduced the Auro Chatbot to resolve customer queries 24x7.

• Artificial Intelligence (AI)

AI plays a vital role in modern financial technologies. From fraud detection to powering service chatbots, AI has vast applications in FinTech.

• E-Wallets

E-wallets are virtual wallets where users can deposit funds and store their Credit and Debit Card data. Digital wallets can be used for online payments and fund transfers.

• Mobile Banking

While NetBanking enables you to bank from home or office, Mobile Banking offers an on-the-go banking facility. Download the Mobile Banking App of your bank to access a wide range of banking services on your smartphone.

• Neobanking

Neobanks are digital banks that don’t require the physical setup of normal banks. These banks use your email address, phone number, etc., to offer certain online banking services. However, they partner with a physical bank in accordance with the RBI guidelines to provide digital-only banking services.

How Safe is FinTech?

While there are players in the Indian FinTech industry that have been around for a long time, new start-ups are sprouting up every day. Thus, it is essential for consumers to ensure they only deal with trusted companies that lay a vast emphasis on security and confidentiality. 

Key Takeaways:

• FinTech is an aggressively growing industry in India. It is revolutionizing finance and reshaping the future of the banking ecosystem

• To make FinTech accessible to consumers, AU Small Finance Bank offers an extensive range of digital products and services.

• From AU 0101 App/NetBanking, AU Video Banking to Online Account Opening, Digital Savings Account, Online Loan Application, and UPI Payments, customers can benefit from the latest financial technologies with us

https://www.digipay.guru/blog/the-impact-of-fintech-on-banks-and-financial-services/

https://www.forbes.com/advisor/banking/what-is-fintech/