Fintech

Fintech is a portmanteau of financial technology that describes an emerging financial

services sector in the 21st century. Originally, the term applied to technology applied to the
back-end of established consumer and trade financial institutions. Since the end of the first
decade of the 21st century, the term has expanded to include any technological innovation in
the financial sector, including innovations in financial literacy and education, retail banking,
investment and even crypto-currencies like bitcoin.

Since the internet revolution and the mobile internet revolution, however, financial
technology has grown explosively, and fintech, which originally referred to computer
technology applied to the back office of banks or trading firms, now describes a broad variety
of technological interventions into personal and commercial finance.

According to EY's Fintech Adoption Index, one-third of consumers utilize at least two or more
fintech services and those consumers are also increasingly aware of fintech as a part of their
daily lives.

Fintech's Expanding Horizons

If one word can describe how many fintech innovations have affected traditional
trading, banking, financial advice and products, it's 'disruption,' as financial products
and services that were once the realm of branches, salesmen and desktops move
toward mobile devices or simply democratize away from large, entrenched
institutions. For example, the mobile-only stock trading app Robinhood charges no
fees for trades, and peer-to-peer lending sites like Prosper Marketplace and Lending
Club promise to reduce rates by opening up competition for loans to broad market
forces.

Figure 1: Msot promising Fin Tech opportunities in India 2016

New Tech in Fintech
New technologies, like machine learning/artificial intelligence, predictive behavioural
analytics and data-driven marketing, will take the guesswork and habit out of
financial decisions. "Learning" apps will not only learn the habits of users, often
hidden to themselves, but will engage users in learning games to make their
automatic, unconscious spending and saving decisions better.

Fintech Users
Who uses fintech? There are four broad categories: 1) B2B for banks and 2) their
business clients; and 3) B2C for small businesses and 4) consumers. Trends toward
mobile banking, increased information, data and more accurate analytics and
decentralization of access will create opportunities for all four groups to interact in
heretofore unprecedented ways.

Impact of Fintech on common people

 Bye-bye bulky wallets, welcome digital wallets.
 My phone is my credit card, now and forever
 Need to split the bill? Why don’t I text you the money?
 My family abroad is less than 15 minutes away if they ever need some
financial assistance
 Rest in peace, dear plastic credit card
 Forget payday loans. The army of peer-to-peer loans is rising.
 Bye-bye financial advisers and steep wealth management fees

Fintech market report (2014-2016)

Future of Fintech
  fintech will reshape the collection of data and turn it into actionable insights
 Smart Finance- Automating the process of knowing which payment to use
 Place your finger on the scanner to pay

Blockchain
Blockchain is the technology that enables the existence of
cryptocurrency. Bitcoin is the name of the best-known cryptocurrency, the one for
which blockchain technology was invented. A cryptocurrency is a medium of
exchange, such as the US dollar, but is digital and uses encryption techniques to
control the creation of monetary units and to verify the transfer of funds.
Blockchain also has potential applications far beyond bitcoin and cryptocurrency.
Blockchain is, quite simply, a digital, decentralized ledger that keeps a record of all
transactions that take place across a peer-to-peer network. The major innovation is
that the technology allows market participants to transfer assets across the Internet
without the need for a centralized third party.
How is the Fintech Industry leveraging Blockchain?

In a way, cryptocurrencies are a part of the Fintech Industry and their entire business
model is based on blockchain, wherein they offer virtual currency to anyone who can
purchase parts of one unit of that currency and keep trading with that part, thereby
making money in the process. Buying cryptocurrencies is also considered as a long-
term investment by many. The beauty of these virtual currencies is that fact that
because they have been built on blockchain, they are decentralized in the sense that
there is no central bank governing them.
In Brazil, recently they have managed to lower exchange rates in the currency and
bullion markets using blockchain. There are exchange start-ups who are leveraging
blockchain based efficient automation processes to lower exchange rates.

Because of its existing nature of application, blockchain has been at the forefront of
some path breaking innovation done by Fintech start-ups across the world. Whether
it is money transfers, currency exchanges or organizations providing infrastructure
and transaction protocols that enables banks to provide financial settlement at lower
rates, Blockchain is driving new age innovations across the Fintech landscape.

Potential Use Cases of Artificial Intelligence for FinTech

1. Accurate Decision-making

Data-driven management decisions at lower cost lead to a different style of

management, where insurance leaders and future banking agents will ask the right
questions to machines, rather than to human experts. Machines will then analyse the
data and will come up with the recommended results, which can help leaders and
their subordinates take better decision.

2. Fraud detections and Claims Management

Analytics tools collect evidence and analyse data necessary for conviction. Artificial
Intelligence tools then learn and monitor user’s behavioural patterns to identify rarity
and warning signs of fraud attempts and incidences. Claims management can be
build up using Machine Learning (ML) techniques in different stages of the claim
handling mechanism.

3. Insurances Management
Insurance management with AI systems will automate the underwriting process and
utilize more crude information to make better decisions for the customers. Automated
agents can assist the user online, in determining insurance requirements.

4. Automated Virtual Financial Assistants

Automated financial assistants and planners assist users in making financial
decisions. These include monitoring events, stock and bond price trends according
to the user’s financial goals and personal portfolio, which can help in making
recommendations regarding bonds and stocks to buy or sell. These systems often
called “Robo-Advisors”.

5. Predictive analysis in Financial Services

Predictive analysis can help calculate credit scores and help prevent bad loans.
Predictive analytics uses a massive amount of data to find patterns and predict
insights. These results and insights can reveal what will happen next: what the
customers are going to buy, how long your employee might last, etc. Predictive
analytics include everything from sophisticated statistics to Data mining.

Cryptocurrency
A cryptocurrency is a digital or virtual currency that uses cryptography for security. A
cryptocurrency is difficult to counterfeit because of this security feature. A defining
feature of a cryptocurrency, and arguably its most endearing allure, is its organic
nature; it is not issued by any central authority, rendering it theoretically immune to
government interference or manipulation.

There are technically over 1000 cryptocurrencies, only a handful are relevant. Of
those, even less have a market cap above $1 million.
The most relevant cryptocurrencies are:

1. Bitcoin: Bitcoin was the first major usable cryptocurrency, it has the highest
market cap, its coins generally trade at the highest cost of all cryptocurrencies
(about $16000 USD as of Jan 2018). Despite the big increase in price, Bitcoin
is the best choice for anyone entering the cryptocurrency space. It is the most
familiar and invested-in coin, it’s a lot of things. primarily Bitcoin is the reason
anyone is talking about cryptocurrency in the first place.

2. Litecoin: Litecoin is probably the second most important digital coin. It had
the third-highest market cap as of June 2015, but today it sits closer to 7.
Despite the decline, CPU mining is still sort of possible, people know what a
Litecoin is, it uses essentially the same technology of Bitcoin, and it costs
about 1/50th – 1/100th of what Bitcoin does.
3. Ethereum: Is probably the third most important coin.It has a less costly than
Bitcoin, and has the second highest market cap.
4. BitcoinCash and Bitcoin Gold: BitcoinCash is a spin-off of bitcoin, meant to
have faster transactions, voted on and implemented by the Bitcoin community.
Bitcoin Gold is also a spin-off, the goal with that coin is to have a coin that can
be mined with a GPU (graphics processor, like the ones AMD and NVIDA
make)