Financial technology (also known as fintech) refers to new tech which seeks to enhance and streamline the efficient delivery and utilization of financial service. The evolution of finance started roughly ten years ago with the advent of the internet and smart phones. Since then, however, fintech has developed rapidly, and since the advent of mobile applications specifically for smart phones, fintech itself has come of age. New technologies in finance such as mobile apps, internet-of-places (IoP) technology, and virtualization are redefining the way banks and other financial institutions to provide financial services to consumers and businesses.
Virtualization is a growing trend in finance technology which seeks to eliminate physical servers in which applications are housed, thereby saving both space and money. By eliminating a need for additional IT personnel, virtualization benefits banks because it allows them to expand their existing IT infrastructure more quickly and easily. Internet-of-places or IaaS is a web-based computing model that delivers hosted software and services to end users via the Internet, rather than through hard disks or other media. Immense competition among banks and financial companies in the past few years has forced them to look for innovative solutions that will not only compete in the current market but also help them save money by migrating their business to a low-cost provider who will better serve their customers.
Banks and other financial services players face an imperative to change and evolve their core business models to focus more on customer needs. Many current financial services functions such as bill payment and banking can be done entirely on mobile devices, thanks to new internet-based software like Venuekit. Tech experts have been calling for more innovation in banking because even the traditional banks are facing fierce threats from tech giant Apple and Google to take the throne of leading financial services players. Tech experts argue that financial institutions will face severe backlash if they attempt to delay, adjust, or even roll back any of their innovations which have taken place due to high tech competition. In response to these demands, traditional banks are scrambling to find innovative ways to fight back against their tech rivals.