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How fintech is changing and improving financial services

How fintech is changing and improving financial services 1

The world of finance is quickly evolving. In the last 10+ years, we’ve experienced a huge technological leap as blockchain and related technologies have been introduced. Nowadays, you might often hear the buzzword “fintech” being tossed around on the news and in social media. That’s because fintech has played an essential role in taking our financial systems to the next level.

So, what exactly is fintech and how does it change and improve financial services around the globe? Let’s find out. 

What is fintech?

Fintech (also spelled FinTech) is a portmanteau term that blends “finance” and “technology.” In other words, any financial service business that is heavily dependent on new technology is a fintech business.

So, what would be a good example of a fintech business? There are dozens — if not hundreds — of new businesses, startups, and projects that can be described as fintech and offer various technology-based products and services to improve our existing financial systems. One example of a fintech venture would be a cryptocurrency exchange. 

This also means that a fintech’s operations have to change to keep up with the latest technologies. So let’s see how that happens and how the existing systems are affected.

Regulatory implications

Pre-fintech financial systems were heavily regulated, and they still are. There’s a clear line of what banks can and cannot do, and every country on the planet has a legislative framework that makes such systems possible and sustainable. These rules are now starting to change, however.

A great example is decentralized finance. Until recently, our regulators have been focused on banks as the main intermediary for the majority of financial activities. But that all changed when digital currencies like ether and bitcoin were introduced in a space where banks had no influence.

The Securities and Exchange Commission (SEC) is one of the regulators that decided to switch from a reactive to a proactive stance and recognizing interest in cryptocurrencies. The SEC found decade-old legal pieces that they were able to incorporate into the legislative framework for new assets and technologies. 

For example, the SEC struggled with whether to recognize cryptos as tokens or securities. What helped them was the supreme court case SEC v. Howey in the 1940s, which led to the regulator taking the view that cryptos were securities.

Regulatory changes in the fintech sphere are ongoing. In fact, they haven’t even started in most countries. It will be difficult to incorporate the new disruptive technologies into the existing regulatory framework, so lawmakers around the globe will have plenty of work to do. 

Automation of financial advice

Most of the people around the globe aren’t financially educated. Those who have some financial knowledge still need continuous assistance to learn how to handle their finances. The good news is that technology can help us with this by automating financial advice. There are already robot consultants and virtual assistants capable of helping users with their financial service needs. 

Customers can receive virtual help with customizing investment portfolios, choosing the right financial product before purchasing, minimizing their bills, rearranging debt, etc. This new approach allows financial service providers to reduce their expenditure, enter new markets, improve time-to-market for new products, and improve overall customer experience.

Most promising digital technologies in the financial sector

Here’s a quick overview of all the technologies that are being used in the tech part of fintech.

Artificial Intelligence

Artificial intelligence (AI) refers to computer systems that simulate humans’ problem solving and decision-making abilities. This enables machines to process information more intelligently, which is why AI is already used in such financial operations in areas such as risk assessment, risk management, fraud detection, credit decisions, financial management, financial advisory services, and more.

Big Data

Big Data refers to the mass of information used for predicting customer behavior and developing strategies. The finance industry generates a lot of data, with billions of dollars moving around the globe daily. Thanks to big data analytics, the finance industry is improving. 

For example, big data in combination with machine learning can help us follow real-time stock price changes from the comfort of our home. Moreover, big data helps AI-driven fraud detection services by providing huge amounts of comparative data. It is also used for risk analysis to decide whether certain financial moves are worth it or not.  

Robotic Process Automation

Robotic Process Automation (RPA) is a process that facilitates building and deploying software robots. Both simple and complex tasks can be automated to make banking smooth for users and convenient for banks. For instance, complex tasks that can be automated, such as purchase order processing or invoice processing, are often now conducted by robots. 

Moreover, bots can further improve financial reporting by analyzing huge chunks of data and help decision-makers of a company make the right moves. RPA is often used in combination with other technologies, such as artificial intelligence. 


Blockchain is the technology that completely shifted how we view investment and banking. It offers a more secure, transparent, and decentralized approach to finance. It also offers greater anonymity and better control. 

This technology can help by improving record-keeping, automating trade, finance and approval workflows with smart contracts, enabling P2P transfers, and making transactions more secure. 


The world is changing faster than ever, and so too is the finance sector, which is increasingly influenced by new technologies, including AI, Big Data, RPA, blockchain, and more. The best part is that we are still exploring the scope of these technologies, meaning they could be further improved to make financial services even more convenient and available to everyone around the globe.

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