FINTECH IN THE TRADITIONAL BANKING SYSTEM: SHWETA

Financial Technology also known as FinTech comprises of those companies which use

technology rather than softwares, to provide more user friendly and accessible financial services.

FinTech has gradually enclosed many applications which are consumer based, ultimately

benefitting the consumers. It has completely changed the mode to access accounts or finances for

the customers. Simultaneously, it has build threat for the Traditional Banking Systems. One of

the core reasons why FinTech has gained a lot of attention is that, many customers these days do

not feel to go for the traditional banking services, infact they prefer the services which are viable,

reliable, quick and also safe at the same time. FinTech has changed the financial industry

drastically. No doubt this has caused a great hurdle for the traditional banking systems and its

further growth.

There are so many people all around the world who do not have even a single bank account and

FinTech acts as a light for all such people as it provides other options or modes by which people

even not having a bank account, can have access to the financial services. It provides a subtle

and direct access for the customers with their funds. It has come up with a lot of new

innovations, some being the Biometric Sensors, ATM cards with smart chip. In the traditional

banking system, people always worry about losing their ATM cards but after this technology

stepped in people have the facility to access their funds even if they do not have their cards with

them, but the Biometric sensors provides an easy way to access the funds and also eliminates the

compulsion to carry an ATM card. Even in case of ATM cards, people need to remember their

pin, but this technology uses palm sensor, fingerprints, even eye recognition to identify the

correct account holder. It also uses micro-veins which completely eliminates even the slightest

error if possible. Another one is the ATM card with smart chip, which has an EVM already been

embedded in the smart chip. This ATM card with smart chip has got a great facility of creating a

one time password for every transaction, which is valid for just that particular transaction;

thereby reducing the chances of financial frauds which is very common these days. The other

best thing of this technology is the Artificial Intelligence.

Over these years, AI has gained a lot of importance when it comes to the FinTech banking

services. With the advent of technologies, fraud is also being done in a very neat manner. It is a

very lengthy process and time consuming too when it comes to the investigation of the fraud. An

alert is given by the software used by the banks in the traditional banking system for the

detection of fraud if any false transaction happens. Further, investigation is coupled with it and

then finally it is decided whether fraudulent transaction took place or not. It is a delayed process

and hence, it has become very difficult to combat these type of issues. Therefore, slowly banks

have adopted the AI technology. AI not only helps in detecting frauds but also reduces the risk of

financial loss. On the other hand, E-Wallets and mobile banking are also a great innovation of

the FinTech financial services. Some of the famous companies which have gained a lot of

attention of the customers are Samsung Pay, Apple Pay and PayPal. Mobile Banking is one of

the most common services being used nowadays. Customers can pay bills within no time and it

also helps in checking balance and many more such things; thus providing direct access to the

funds within minutes.

Nowadays, FinTech has become a very useful and feasible technology which helps customers

and banks in a number of ways. Due to the growing demands of the customers and with the

evolution of the technologies, FinTech technology has been accepted by the banks for providing

a reliable experience.