Financial industry has been playing significant roles in the economy. Thus, maintaining its stability is very important. A study stated that Fintech shows a positive effect in maintaining financial stability causing more people to be part of it. Mirroring the global finance industry's transformational change, the Fintech industry is undergoing rapid digitalisation. However, what exactly is Fintech?
Definition of Fintech?
The term Fintech is an abbreviation for Financial Technology. Initially, the term Fintech refers to the technology used in financial institutions. Nevertheless, with the emergence of 21st-century technology that continues to grow and develop, Fintech is now used to assist businesses and consumers in better managing their finances in terms of operations, processes, and more. Consumers can now go cashless without fear because payments can be made via smartphones.
Fintech is not only used by the financial sector, such as banking and insurance companies. They were also used in the education, health, and other industries. 'Financial Technology' can refer to any innovation, ranging from software used in banking or any financial institution to daily transactions via smartphones, crowdsourcing, and digital money such as Bitcoin. Nonetheless, despite Fintech's rapid expansion, people continue to rely on traditional banking since many customers do not have direct access to financial technology.
What will Fintech bring in 2022?
Since Fintech offers numerous opportunities to drive financial inclusion that will affect consumers' lives, it is natural to answer the question. People are eager to know the changes Fintech will bring to them, and how it will change the future today. Below are a few examples of Fintech development.
- Crowdfunding
Crowdfunding is a method in which a group of individuals combine funds from various sources to invest in projects that they are interested in. Aside from assisting investors in investing in potential small and medium-sized enterprises (SMEs), it also assists start-ups in realizing their dreams by utilizing internet platforms such as pitchIN, MyStatr, and many others. - Cryptocurrency
Cryptocurrency is one of the drifts in Fintech. In recent years, cryptocurrency has become involved in the world of investment. Many Malaysian youths are currently engaged in the crypto world and are interested in studying and delving into the industry. Muslim investors, on the other hand, must be aware of and comprehend cryptocurrency laws. As a result of Sharlife's presence, Muslim investors can select the best strategy to trade. - Payment System
Malaysia has effectively integrated online payments today. Mobile payments, such as Boost, Touch n Go, ShoopePay, and others, can be used for everyday transactions with ease. Malaysian consumers can now make purchases by making instalment payments thanks to the current popular subject, Buy Now Pay Later (BNPL). In the future, there will be numerous forthcoming technologies and apps that will make customers' daily life more comfortable.
As there is more Fintech could offer in 2022, people should be aware of the current development and make use of it wisely.
Conclusion
The year 2021 was the evidence of Fintech expansion. The rise of financial technology has created several opportunities for consumers and countries worldwide, particularly in emerging countries such as Malaysia. These opportunities must be taken advantage of because exceptional opportunities do not come along every day. Along with Malaysiaâs aim in becoming Islamic Fintech hubs, the government and financial institutions including the youth must seize the wide-ranging opportunities today.