28 May, 2018 | Blogs
Over the years, technology has shaped many things, and one of those things is the way we handle finances. Let’s face it, these are changing times, and platforms like PayPal, Google Wallet, and Apple/Android Pay are the new phase of the larger financial system, especially in the commercial sector. This is what FinTech is. FinTech, or financial technology, refers to how technology integrates to the financial service sector. FinTech greatly assists businesses all over the world to better handle all of the financial aspects pertaining to those businesses’ practices. Read more about FinTech here.
FinTech, Blockchain and Cryptocurrency
If you think about it, Financial Technology has paved way to the existence of Blockchain. Blockchain itself as a relatively new technology has paved the way to the existence of cryptocurrency. Make no mistake of underestimating its resourcefulness when it comes to handling business transactions. Blockchain allows business participants to transact with their clients directly without the need of a third party coming into the mix. This way, Blockchain behaves more of a digital ledger which keeps track of transactions over a Peer-to-Peer network.
It does this through a series of steps before, for example, a transaction is completed. In between those steps, cryptocurrency is part of the information checklist that has to be verified before a transaction is completed. Cryptocurrency is an encrypted medium of exchange which is stored in the Blockchain via electronic means. This is the reason why many businesses and companies are striving hard to integrate this collaborative technology to their business activities; that is, to change the way they carry out business processes at a reduced cost.
FinTech and Blockchain have countless applications, including in automotive where consumers can manage fractional ownership autonomous vehicles, in the healthcare sector where health information can be shared discreetly, in voting applications as well as in the financial sector where business processes and settlements can be done effectively at a reduced cost.
Due to this, FinTech is being adopted into various businesses including in the MENA region. Businesses here have now realized the inherent importance of employing FinTech into their business practices, and have highlighted strategies to help them get caught up. Two examples in the MENA region include Souqalmal, a price comparison website in the Middle East that allows users to compare financial products, and Telr, a payments platform that offers a set of unified APIs and tools enabling businesses to accept and manage online payments via web and mobile. FinTech, being a complex initiative, requires a specific skill set and knowledge for it to work. Sure enough, in the future, FinTech will be utilized in all kinds of businesses worldwide.