CURENT

ISSUE AIS:
FINTECH
AIS655
 WHAT IS FINTECH ?
Known as Financial Technology.
Integration between Digital Technology &
Financial.
Fintech is the term used to refer to innovations
in the financial and technology crossover
space, and typically refers to companies or
services that use technology to provide
financial services to businesses or consumers.
EVOLUTION OF MODERN FINTECH
USER OF FINTECH
 TYPES OF FINTECH
Payment Gateways
Online payment gateways have revolutionized payment,
making it convenient, easy, and highly accessible for all.
The most notable contribution of payment gateways is that they
allow people to send money without the need for a bank. By
removing the expensive bank fees, payment gateways have
given consumers considerable benefits and savings.
Fintechs are also upgrading the security aspects of online
payment gateways. For instance, Fintechs are developing
blockchain-based systems to make electronic money
transfers more secure and cost-effective, compared to banks.
 TYPES OF FINTECH
Mobile Payments
With 5.11 billion unique mobile users worldwide, global
mobile payment transactions will be worth over $1 trillion in
2019. By 2023, that figure is expected to exceed US$4.3 trillion
.
Fintech firms are constantly improving their products and
services to better serve consumers everywhere. Advancements
in mobile wallet technology, digital authentication, and NFC
are spearheading these developments.
MOBILE PAYMENTS SERVICES
 TYPES OF FINTECH
Budgeting Apps
Monitoring finances commonly involve navigating through
spreadsheets through paper receipts and checks.
Today–thanks to budgeting apps–monitoring expenses and
planning budgets have become easy and more efficient.
Budgeting apps allow anyone to easily ad effectively closely
monitor their expenses, income, and other finances. These
wonderful apps have truly transformed how consumers see and
perform their financial activities.
 TYPES OF FINTECH
Consumer Banking
About 1.7 billion adults remain without a bank account or a
ccess to a mobile money provider
. This is mainly because traditional banks had been operating in
ways that marginalize many impoverished people.
Fintech’s alternative consumer banking products and services
are designed to address this long-standing issue. By making
financial products more accessible and affordable, fintech firms
provide a better alternative for consumers.
Innovative fintech banking examples abound. From mobile
banks to online digital banks, fintech banks are changing
banking as we know it.
 TYPES OF FINTECH
Robo-Advising and Stock-Trading Apps
This innovative fintech service uses smart algorithm technology to provide
intuitive asset recommendations.
Robo-advising, in effect, portfolio management has achieved unprecedented
efficiency, including lowering its costs. Financial advisers can now analyze
numerous portfolio options more efficiently, 24/7, simultaneously. No wonder,
an increasing number of robo-advising services continue to emerge.
Another popular and highly innovative fintech contribution is the invention of
stock-trading apps.
Today, stock trading solutions allow investors to easily trade stocks at the flick
of a finger on their smartphones.
With cheaper and low-minimum stock-trading apps in the market, investing had
never been easier. Thanks to these fintech innovations, making those stock-
trading apps can now be done anywhere, without any budgetary constraints.
ROBO-ADVISOR
 TYPES OF FINTECH
Insurance
Insurtechs are optimizing the use of innovative insurance apps to
make more people insured. Like what it does in other industries,
fintechs are making insurance more accessible to the
underserved masses.
Firms in this category are typically collaborating with
conventional insurers to automate insurance procedures and
extend coverage. Insurtechs have a myriad of areas to innovate,
from wearables for health insurance to mobile care insurance.
Crucial to insurance innovation is the removal of cumbersome
and time-intensive processes. With fintech-provided insurance, 
anyone can now buy car insurance in just a few hours.
 TYPES OF FINTECH
Blockchain and Cryptocurrency
Blockchain uses encryption technology to create cryptocurrencies,
a promising new medium of exchange that is more secure and
better than cash.
In fact, leading organizations from various industries have already
achieved significant benefits from blockchains and
cryptocurrencies. These include reduced costs, faster transactions,
enhanced efficiency, better traceability, improved security, and
increased transparency.
A notable emerging blockchain application is that of 
smart contracts. These are digital, self-executing contracts that
can electronically facilitate, verify, and implement agreements.
BLOCK CHAIN
HOW BLOCK CHAIN WORKS
IMPACT DUE TO BLOCK CHAIN
 EXAMPLES OF FINTECH
Crowdfunding Platforms
Crowdfunding platforms allow internet and app
users to send or receive money from others on the
platform and have allowed individuals or businesses
to pool funding from a variety of sources all in the
same place. 
Famous Companies: Kickstarter, Patreon,
GoFundMe
 TOP FINTECH COMPANIES
TYPE OF FINTECT COMPANY #1 COMPANY #2 COMPANY# 3

PAYMENTS Paypal Authorize.net Payoneer

GATEWAY
MOBILE Venmo Revel System Apple Inc
PAYMENTS
BUDGETTING Intuit Acorns Wally
CUSTOMER Green Dot Net Spend Moven
BANKING
ROBO ADVISING Vangard Robinhood Charles Schwab
INSURANCE Oscar Health Root Insurance Policy Genius
Block Chain & Block Chain Coin Base Binance
Cryptocurrency
CROWDFUNDING Kick Starter GoFundMe Upstart
FINTECH ECO SYSTEM
 Fintech : Usage and Benefits
Replace the traditional financial service management in
financial services
Transformative innovation and added value for consumers
Easier to attract consumers to invest across borders at
suitable time and place
FinTech investment competition provide value and
improvements in a global, easy, fast, efficient and inexpensive
future
Acts as catalyst to solve problems and decide on setting a
potential investment management service system
Reinforce key of capital positions in mutual fund / unit trust
investment
 CURRENT ISSUES OF FINTECH
Security issues and data privacy
Big data and AI integration
Blockchain integration
Compliance with government regulations
Lack of mobile and tech expertise
Growth issues and effective marketing to acquire
customers
User retention and user experience issues
 1- Security issues and data privacy
When it comes to virtual security, things start getting harder:
vulnerabilities are much more discreet and have potentially more
impact on users, as not only their money is at stake but their
personal information too.

Solution:
Two-factor authentication
Biometric authentication
Data encryption and obfuscation
Real-time alerts
Behavior analysis
 1- Security issues and data privacy…Cont
Making Sure the application is fully secure.
Constant updates —
Thorough documentation
Security testing 
Penetration testing 
Real-time monitoring 
Administrator roles in the admin panel
2- Big data and AI integration

AI will revolutionize the

way banks gather
information and interact
with customers.
Big data and artificial
intelligence are two
necessary technologies for
any modern banking
software.
 2- Big data and AI integration

Combined with big data, artificial intelligence can

help you automatically detect fraud, perform risk
analysis, and manage transactions effectively.
However, these technologies are challenging to
implement: they require exceptional engineering
skills and constant maintenance.
 2- Big data and AI integration

Solution:
The best solution is to hire an expert in big data and artificial intelligence
and allow them to learn your business from the inside to find out your
needs and determine how to meet them with industry best practices.
Because banking systems are complex, just connecting AI systems
through APIs won’t be enough.
For AI and big data to work together, you’ll need to teach the AI through
machine learning. For this, you’ll need large amounts of data to train your
system. Most banking applications are unable to process, let alone gather,
such large data sets. You can solve this problem by using a one-shot
learning model that allows you to train your machine learning system on
smaller amounts of data.
 3- Blockchain integration

Integrating a blockchain is a challenge for many financial

institutions. So far, well-established institutions such as banks
have been slow to pick up on the blockchain trend. Startups are
more likely to try to disrupt the FinTech sector.
Also, because blockchain financial technology is relatively new,
there are few blockchain experts on the market. To develop and
maintain a blockchain-based system, you’ll need to find, hire,
and keep your own blockchain development team.
 3- Blockchain integration

Solution
Blockchain integration requires specific expertise, so to use this
technology in your mobile app, you need an expert who knows
how to securely integrate it into your system.
 4- Compliance with government regulations

Finance is one of the most regulated sectors. Government

regulations will be your concern even if you have more traditional
FinTech software that doesn’t use a blockchain and other yet-to-
be-proven technologies.

Solution:
Check your software and internal processes for legal compliance
and, if needed, hire a legal consultant to lead you through all the
details. Make sure your legal department is aware of the latest
government policies so you can make changes immediately.
 5- Lack of mobile and tech expertise

Some banking app makers try to replicate websites, but mobile

software is very different. Lack of expertise in fintech mobile app
development results in non-user-friendly applications that don’t use
mobile devices to their fullest potential. For example, apps may not
benefit from NFC chips, maps, geolocation features, fingerprint
unlocking, and other mobile-specific features

Solution:
Create your own development department or hire developers from an
outsourcing company to build FinTech products app with mobile
development best practices in mind. Another way to gain mobile
expertise is to hire a consultant that will help you establish a
development team or educate your existing team and build a strategy.