Technology is changing the way finance, accounting, and banking companies do business. Automation, artificial intelligence, and other forms of technology are causing organizations to alter their strategic direction, change how they approach management, promote, hire, and retain employees.
Leading the charge is fintech. Here, we will take a look at what fintech is and how it is impacting the financial industry.
What Is Fintech?
Fintech is a new buzz term that is gaining a lot of traction in the finance and accounting industry. Fintech stands for financial technologies. It is the usage of technology, such as mobile applications, artificial intelligence, and automation tools to perform finance-based functions and tasks.
Bernard Marr, on Forbes, explains what fintech is and how it impacts the financial sector:
“FinTech stands for Financial Technologies, and in its broadest definition, that’s exactly what it is: technologies used and applied in the financial services sector, chiefly used by financial institutions themselves on the back end of their businesses. But more and more, FinTech is coming to represent technologies that are disrupting traditional financial services, including mobile payments, money transfers, loans, fundraising, and asset management.”
How Does Fintech Impact Finance Jobs?
Fintech offers alternative and innovative financial solutions to what financial institutions traditionally offer their customers. Most fintech companies are start-ups and are in direct competition with finance organizations.
Since most fintech start-ups are agile and operate in niche markets, they have the ability to compete with larger companies. There are two key ways fintech could impact the finance industry:
- Job loss: Many are concerned fintech will lead to massive job losses in the financial sector. These service providers are offering new services that change the way people interact with financial institutions. Crowdfunding, mobile banking services, apps, and online banking technology reduce the need for people to physically visit bank branches and meet with advisors for financial transactions.
- Finance industry structure: Fintech is forcing large financial institutions to rethink how they are organized, how they operate, and how they deliver products and services to the masses. Companies will be forced to operate more efficiently, and it will force employees and finance professionals to broaden their skill sets to find work in the industry.
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