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Over the last decade, one has seen the entry of Fintech in the financial market like a storm that has redesigned the financial sector. This sector combines the functions of financial services and technology and can be defined as that sector which is using innovation to make the financial services more effective, available and secure. Fintech encompasses areas such as mobile banking applications to blockchain technology that has impacted different areas of the financial sector in ways that leads to changes of traditional practices.

Financial Inclusion

Arguably the biggest area that has been affected by the use of fintech is opening up financial services to all. Traditionally, the financial services were deployed mostly among the major organizations with brick and mortal branches, thereby excluding those who could not access formal financial services. This has been filled by fintech that has developed applications that users can use their mobile phones or laptop to carry out banking related duties. Mobile banking apps for instance enable users to check balances, transfer monies or even apply for loans from the same application, no need for them to book an appointment at the banking facility. They have especially proved handy to users in the areas of low or poor branch density and provision of banking facilities.

Alternative Lending

However, due to the advancement of fintech a new wave of financial inclusion has been made possible through lending. This is especially problematic for those applicants who have a little or no credit history or other non-conventional credit history. Some of the new age fintech companies like the P2P lending companies have come up with newer ways of credit profiling. These applications provide loans to a more diverse group of clients since some of the parameters include activity on social networks and previous transactions; thus, these applications promote financial inclusion and open options for credit applicants who would not be able to use more traditional lending services.

Robo-Advisors

The other innovation on the fintech space is presence of robo-advisors. These automated platforms give recommendations on the investments and also they handle investment portfolios. Robo-advisors operate at a lower fee than regular financial advisors and by doing so they provide investment management solutions that come at a comparatively lower price. Due to the large amounts of financial data, together with the use of higher level algorithms, robo-advisors are capable, at a slower pace, of proposing suitable investment profiles based on the urged risk tolerance and financial objectives. This technology not only cuts the cost of investment management but also bring high quality professional advice within the reach of everyone.

Blockchain Technology

Blockchain technology is another innovation that has changed the face of the financial sector as a part a fintech breakthrough. Blockchain, as a distributed ledger, improves the clarity and solidity of the economic operations. Since it incorporates the use of a distributed ledger, over a network of computers the authenticity of transactions and the minimization of the rates of fraud are enhanced. This technology is not limited to crypto currency as people may view but it extends to the supply chain, contract agreement, identification etc. With the advancement of the blockchain technology and its adoption by more companies, the chance of a revolution of the traditional financial systems is big.

Payment Innovation

In addition, payment innovation is another disruption arising from fintech to enhance the activities of consumers with easy transaction processing. Mobile payments, specifically through the near field communication technology users are able to make payments through touching their Smartphone or contactless card to another device. As this has to do with payment, this convenience has also helped to make payments faster while at the same time minimize on the use of the physical cards. Furthermore, smartphone payment solutions or e-wallets including apple pay as well as Google wallet has helped to ease the payment process as well as offer the user a secure way of handling there payment details.

Insurtech

It has also triggered insurtech which is a subdiscipline that seeks to transform insurance through technology. Through using data analysis and technology such as big data, AI, and machine learning, insurtech organizations offer custom Insurance products and efficient claims management. For instance, usage based insurance models adapt maxims based on data from personal usage in real use situations such as telemetry. It brings about constructive approach to underwriting, and improves the customer value by pricing accurately in accordance with risk characteristics.

Artificial Intelligence in Fintech

It is noteworthy to realize that AI has reinforced the application of fintech in the financial sector even more. Automated chatbots and virtual assistants offer support to the users on the go and supplement customer service, as well as organizational performance. Such technologies can respond to frequently asked questions, conduct transactions, and at times provide financial advice, thus relieving workforce of most of these tasks. Also, performance of analytical tasks using artificial intelligence tools helps in the quick identification of fraud, determining the state of the market, and the performance of various financial indicators by financial institutions.

Conclusion

Summing up, the distribution of the financial industry by means of fintech is in progress. With cntinuous improvements on space, openness and speed, fintech is thus offering new ways of branching out the conventional customs of finance and opening up a new fortune. The part of fintech in the successive change of the financial sector is undoubtful unceasing, The continuous development of technology will promote the extent and availability of the finanical system.