Fintech addresses the issues related to credit scoring and the information it uses by implementing different nonfinancial data such as type of browser and hardware used to access the internet, history of online searches and purchases.
Fremont, CA: The financial sector is going through technological transformation. Also, the growing demand for digital services is driven by the COVID-19 pandemic is fueling the change.
Here are three fintech trends revolutionizing the financial industry:
New Communication Channels
Communication innovation, propelled by various digital platforms in mobile communication, online shopping, and social media, has impacted consumers' daily lives, increasing their digital footprint and data.
The move from in-person bank branch visits to remote, online communication usually enhances customer convenience and makes financial mediation more cost-efficient. It also drives competition among banks to cater to more distant customers.
Regulatory agencies need to make sure that their expertise is suitable for the industry to prevent cybersecurity risks and regulatory arbitrage. New monetary policy needs to be entirely understood, and central bankers are more countercyclical. Central banks need to redesign their monetary policy implementation toolbox as new players make banks less critical for the financial system. And allow nonbanks access to liquidity lines and integrate them into their operations.
Fintech will likely reach out to over a billion unbanked people worldwide, and the transformation in the financial system design can be significant.
New Types of Information
Fintech addresses the issues related to credit scoring and the information it uses by implementing different nonfinancial data such as type of browser and hardware used to access the internet, history of online searches and purchases. Research shows that these data sources powered by artificial intelligence and machine learning are more powerful than traditional credit assessment approaches and can help progress financial inclusion.
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