What are the Applications of Fintech?

As you know, in today’s era, the speed of technology development and growth has increased greatly, and this trend includes all fields and different industries; Among these industries, we can mention the field of financial businesses that have undergone changes and transformations in the form of financial technologies (Fintech).

It is clear that in order not to fall behind this process, Iran should have entered this race as soon as possible, and due to the existence of challenges such as the lack of practical laws or the multitude of various economic sanctions, it would have traveled a more winding road. In this article, we assume that you are familiar with the concept of fintech and now you are looking for why to use this technology and its various applications. Otherwise, our suggestion is to read the all about fintech article.
Fintechs are formed with the aim of providing different and creative services and products and are classified based on their nature, which we have discussed in detail in the article about the types of fintech companies.

The world today is moving towards sustainable economic models that can create economic opportunities worth 12 trillion dollars per year by 2030. Through technologies such as advanced data analytics, blockchain, or artificial intelligence, fintech can help companies assess and reduce their environmental impact. Also, investors can direct their operations towards more stable assets. As you know, in today’s era, the speed of technology development and growth has increased greatly, and this trend includes all fields and different industries; Among these industries, we can mention the field of financial businesses that have undergone changes and transformations in the form of financial technologies (Fintech).
It is clear that in order not to fall behind this process, Iran should have entered this race as soon as possible, and due to the existence of challenges such as the lack of practical laws or the multitude of various economic sanctions, it would have traveled a more winding road. In this article, we assume that you are familiar with the concept of fintech and now you are looking for why to use this technology and its various applications. Otherwise, our suggestion is to read the all about fintech article.
Fintechs are formed with the aim of providing different and creative services and products and are classified based on their nature, which we have discussed in detail in the article about the types of fintech companies.

What are the uses of fintech?

Investment in fintech reached a figure of about 91.5 billion dollars in 2021, a number that has shown a 20% improvement in investment in 2020. Fintech has different applications in different fields. In the following, we will examine some of these applications.

Digital loans and credits

Large companies referred to as fintech giants, provide loans directly to small businesses. They help in quick lending through data and transaction information. In fact, by using peer-to-peer lending, you allow your users to lend to each other (P2P) for business investments without the involvement of a traditional financial institution. Each of these innovations is possible through the use and help of big data and their advanced analysis in digital platforms.

Mobile Bank

Many financial institutions are adopting or expanding their mobile banking capabilities due to increasing demand for digital banking. Most banks now offer mobile banking functionality on their platforms.

Mobile payments

As you can see, if you poll people under the age of 30 and ask how they prefer to make their payments, they’ll tell you that mobile apps are the top choice. As we have moved from a cash-based society to an increasingly digital one, peer-to-peer services have emerged to replace traditional payment methods. According to reports, in 2018 alone, mobile phone transactions worldwide reached more than 5.4 billion dollars.

Digital currencies and blockchain

Digital currency exchanges have been able to connect users to buy and sell digital currencies such as Bitcoin. The purpose of using blockchain technology is to reduce fraud by keeping the original data in the blockchain.

Insurance

Traditional insurance companies were facing many challenges. Complex regulations, high customer acquisition costs, and high communication management costs are examples of this. But now Insuretech intends to simplify and transform many processes in the insurance industry and also provide insurance services tailored to different market segments.
In fact, “Insuretech” or insurance technology is the use and help of technology to maximize savings and gain efficiency from insurance industry models. A very important and influential technology in the insurance industry, which is considered a type of fintech.

Business

Business and investment have improved with the adoption of the fintech industry. The information obtained from data analysis is often unstructured and unreadable without the help of artificial intelligence technologies. Using natural language processing, these technologies can sift through complex data sets and extract new findings from the data in seconds. Today, traders can run large amounts of data through algorithms and identify how it is performing and what risks it poses.

Banking as a Service (BaaS)

Through banking as a service, fintech can offer a financial institution’s products and services under its own fintech brand. A fintech must pay a fee to a financial institution to access things like a BaaS platform, regulatory expertise, lending-related services, payments, mobile bank accounts, debit cards, fraud management, etc.

Making business carbon neutral

In 2021, a group of 43 international banks, including Barclays, HSBC, Bank of America, Deutsche Bank, and BNP Paribas, pledged to achieve zero greenhouse gas emissions by 2050 or earlier. The US achieved carbon neutrality for Scope 1 and 2 emissions in 2019. The process was such that since 2010, this bank reduced its energy consumption by 45% and switched to renewable electricity.

Limit exposure to carbon-heavy industries

Despite the promise of achieving net emissions by 2050, most banks are still financing the fossil fuel industry. There is still a long way to go to decarbonize the industry. What leading lenders can do to improve the situation is to price the borrower’s full carbon footprint and put pressure on the biggest CO2 emitters. Such costs make carbon emission projects more expensive. Doing such things will cause some lenders to avoid high-risk carbon projects altogether.

Banking rewards for eco-friendly consumers

As consumers become more environmentally conscious, they will be more willing to pay for sustainable consumer brands and services.

In this regard, the modern banking industry decided to reward environmentalists so that they can withdraw their capital from big banks faster and turn to fintech and neo-banks.

For example, they promise consumers to invest their money sustainably and use smart technologies to do so. Allowing consumers to choose how to invest is also one of these rewards.

The benefits of fintech

Fintechs can have many benefits for their various users. These users are divided into three categories: businesses, consumers, and investors, which we will discuss briefly.

Benefits of fintech for businesses
Access to more resources
Business process optimization
Maintain better rates for businesses

Benefits of fintech for consumers

Secure financial services, personalized and according to users’ wishes
Access to sophisticated fintech services with individual advice
Easier access to Credit Pool

Benefits of fintech for investors

Fintech is the best field for disruptive innovation.
The growth of startups increases the chances of investing in the next unicorn.
Alternative investments become more profitable.

The future of fintech

As it is clear, in today’s world, it is impossible to live without the help of fintech, and practically the survival of all businesses is tied to this technology, and they are becoming more and more intertwined day by day. The use of new technologies has made financial services more effective and has completely challenged the traditional banking system. Therefore, the necessity of cooperation of banks with fintech companies and investment in this area is felt more and more every day.

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