Technology has transformed the way we do exactly about everything from shopping to socializing and it�s also turning the financial services industry on its head. Over the previous couple of years, a crop of Fin-tech start-ups has emerged, using technology to make it easier for people to wish for an edge, make payments, and even get a loan.

For millennials, it�s particularly appealing because they grew up with mobile devices and wish to conduct financial transactions the same way they could share pictures or apply for employment. The technology companies recognize that and have capitalized thereon. [Millennial] see financial services as a consumer product which can be how different way of watching it, says James Westar, director of research at IDC, the market research firm.

But it�s not only their fresh perspective on financial markets that are making this industry possible. It�s also a convergence of technology and large data, enabling all types of companies to harness and analyze information in new ways, whether it�s arising with a customized investment plan or approving a loan through a special underwriting process.If you would like term life insurance, that�s a simple transaction.

But once you get to complex financial products, it gets dangerous because there are numerous nuances, explains Williams. When Fin-tech emerged within the 21st Century, the term was initially applied to the technology employed at the back-end systems of established financial institutions. Since then, however, there has been a shift to more consumer-oriented services and thus a more consumer-oriented definition.

Fin-tech now includes different sectors and industries like education, retail banking, fundraising and non-profit, and investment management to call a few of. Fin-tech also includes developing and using crypto-currencies like bitcoin. While that segment of Fin-tech may even see the foremost headlines, the large money still lies within the normal global banking industry and its multi-trillion-dollar market capitalization.

Key Takeaway

• Fin-tech refers to the blending of technology into offerings by financial services companies to strengthen their use and delivery to consumers.
   
• It primarily works by unbundling offerings by such firms and creating new markets for them. Start-ups disrupt incumbents within the finance industry by expanding financial inclusion and using technology to cut down on operational costs.
   
• Fin-tech funding is on the rise but regulatory problems abound. New technologies, like machine learning/artificial intelligence, predictive behavioral analytics, and data-driven marketing, will take the guesswork and habit out of monetary decisions. "Learning" apps won't only learn the habits of users, often hidden to themselves, but will engage users in learning games to make their automatic, unconscious spending and saving decisions better. Fin-tech is additionally a keen adaptor of automated customer service technology, utilizing chatbots and AI interfaces to assist customers with basic tasks and also keep down staffing costs. Fin-tech is additionally being leveraged to fight fraud by leveraging information about payment history to flag transactions that are outside the norm.

Fin-Tech Innovations:
Sort of the foremost active areas of Fin-tech innovation include or revolve around the following areas:

• Cryptocurrency and digital cash
• Blockchain technology, including Ethereum, a distributed ledger technology (DLT) that maintains records on a network of computers, but has no central ledger.
• Smart contracts, which utilize computer programs (often utilizing the blockchain) to automatically execute contracts between buyers and sellers.
• Open banking, a thought that leans on the blockchain and posits that third parties should have access to bank data to make applications that make a connected network of monetary institutions and third-party providers. An example is that the all-in-one money management tool Mint.
• Ensure-tech seeks to use technology to simplify and streamline the insurance industry.
• Reg-tech, which seeks to help financial service firms to satisfy industry compliance rules, especially those covering Anti-Money Laundering and Know Your Customer protocols which fight fraud
• Robo-advisors, like Betterment, utilize algorithms to automate investment advice to lower its cost and increase accessibility.
• Unbanked/underbanked, services that seek to serve disadvantaged or low-income individuals who are ignored or underserved by traditional banks or mainstream financial services companies.
• Cybersecurity, given the proliferation of cybercrime and thus the decentralized storage of data, cybersecurity, and Fin-tech are intertwined.

Fintech Regulation:
The concerns of FinTech regulators have focused on investment fraud, securities of cryptocurrencies, systemic risk regulation, and financial organization functions and concealment, and taxation. Regulators are concerned about the likelihood of AI (AI) making money through deception. Just accepting laws isn't enough to manage FinTech. Regulators will get to be much more proactive now than ever before. New technologies help new players perform activities traditionally run only by institutions that are strictly controlled.

Therefore, arrangements should be made to prevent migrating commercial activities from migrating between businesses seeking mild regulatory control. Regulators' Response to FinTech There are several financial ecosystems within the world, all with varying degrees of complexity and regulatory frameworks.

Given this diversity, there will be no one-size-fits-all approach that can add every country or satisfy all stakeholders in each state. Different regulatory agencies can also have different mentalities when it involves innovation, and these mentalities will play an enormous role in how they react to FinTech. Many regulatory agencies will remain a neighborhood of technology and life. If consumers use financial services in new and innovative ways, it's up to them to manage and adapt to those new technologies.

Summary
FinTech companies, currently operating with little or no capital, are vulnerable to severe regulatory risks which can drive them down and make large institutions dependent. Accurate estimation of the FinTech regulatory environment goes to be vital for both practitioners and investors regarding marketing, data protection, capital requirements, and many other regulations. Therefore, FinTech regulations are of great importance, and changes are expected within the approaching years.