Paperless paychecks have been around since the 1970s, allowing employers to electronically transfer wages into employees’ accounts on payday. Direct deposit, or ACH (Automated Clearing House), saves the time and effort of rushing to a brick-and-mortar bank location and waiting in line to deposit a check before the bank closes. It’s an early example of fintech we take for granted today.
Many more advances have emerged in recent decades, providing us with unprecedented financial autonomy and transforming the finance industry. Though we still need to keep our money somewhere secure, these innovations enable us to perform a wide range of financial transactions from a cell phone—and some sidestep traditional financial institutions altogether.
Fintech, short for “financial technology,” encompasses innovative technologies that enhance and automate the provision and use of financial services. It assists companies, business owners, and consumers in optimizing their financial operations and processes through software and algorithms deployed on mobile devices and computers. Let’s look at a few fintech examples now.
Online Banking
Financial institutions enable customers to access their account 24/7 from the convenience of a secure website or app. These accounts are the same ones that they can access via an ATM or a local bank branch. In fact, customers can perform most banking transactions online, from deposits to transfers, making most bank visits redundant.
Digital Wallets
A digital wallet is a financial transaction app compatible with any connected device. It securely stores payment details and passwords in the cloud. While accessible from a computer, mobile wallets, a subset of digital wallets, are predominantly utilized on mobile devices. In addition to credit cards, digital wallets can store concert or travel tickets, car keys, ID cards, and coupons.
Cryptocurrency
A relatively recent addition to the world of finance, cryptocurrency gets a lot of attention, but not always for the right reasons. Criticisms of this virtual currency include slow transactions, inadequate regulation, a lack of inherent value, and potential use in criminal activities. Though controversial, cryptocurrency may be with us to stay.
Peer-to-Peer Lending
Also known as P2P lending, these platforms facilitate direct connections between borrowers and lenders, establishing their own rates and terms for transactions and allowing individuals to obtain loans directly from other individuals. P2P eliminates the need for a financial institution as an intermediary.
Robo-Advisors
A robo-advisor is a digital platform that delivers automated, algorithm-based financial planning and investment services, often with minimal human oversight. In a common scenario, a robo-advisor will collect information about your financial status and future objectives through an online questionnaire, enabling it to provide recommendations and execute investments autonomously on your behalf.
Rungs in the Ladder to a Finance Career
The University of Texas Permian Basin’s AACSB-accredited online finance programs equip you with financial management skills that can result in rewarding occupations, including leadership roles. All three highly marketable degrees are led by esteemed PhD-level faculty members boasting extensive experience within the finance industry. Explore the fintech, terminology, and trends you’ll need to know with us, online.
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Once you’ve completed a bachelor’s degree, continue your studies with an MBA—highly prized in the business world for its prestige. Build broad business acumen with a special emphasis on finance by completing 33-42 credits. Graduate in as little as four semesters.
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See potential future jobs and corresponding salaries for this degree.
Stick to Your Own Schedule
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Sources:
https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-fintech
https://www.investopedia.com/terms/f/fintech.asp
https://www.investopedia.com/terms/r/roboadvisor-roboadviser.asp
https://www.investopedia.com/terms/d/digital-wallet.asp
https://www.investopedia.com/terms/p/peer-to-peer-lending.asp
https://www.investopedia.com/terms/c/cryptocurrency.asp