Getting to Know What Fintech is, Innovation of Financial Transactions in the Digital Age

In the recent digital era, the trend of financial transactions began to shift from conventional to digital with the innovation of fintech. What is fintech actually? The development of the world of start-up and digital markets in the past decade has brought major changes in various sectors, one of which is the economic sector. Various facilities continue to be stimulated by utilizing the encouragement of technological advances that are increasingly bright.

One of them is the presence of fintech with its leading innovations that make it easier for people to make transactions through digital transactions. You might still not understand what fintech is and what is meant by this digital transaction, that’s why this article is presented to you. What is Fintech?

Definition of Fintech

Fintech or Financial Technology is a hybrid of the economic sector with the help of technology. The National Digital Research Center (NDRC) explains that fintech is a term that refers to innovation in financial services. Whereas the definition of fintech according to the International Bank is innovation in the financial field which has converted the business model to become more moderate. The concept of fintech combines financial systems with technological developments, one of which makes financial transactions more practical, secure, and modern. Not only in the field of payment, but fintech has also reached all aspects of the business of financial transactions to the sale and purchase of shares.

Background of the emergence of Fintech          

Just like other business fields, fintech was born from daily financial problems and is expected to be a powerful solution to overcome them. The current use of massive technology by the public directly requires more effective and efficient accessibility on all fronts. This is where fintech comes with bringing ease and speed of accessibility, especially in economic transactions. As a result, transactions such as shopping, transfers, and other economic transactions can be completed easily, quickly, and without hassle.

Rule of Law Regarding Fintech

As a business line, fintech has been officially recognized in Indonesia and even has its own legal rules. Now, you don’t need to doubt anymore about what is a fintech and its legal umbrella because all have guaranteed security.

Digital Transactions and Electronic Money

Understanding the Advantages of Fintech Whether we realize it or not, the presence of fintech innovation has helped change the lifestyle of Indonesian people. This can be seen for example from the habit of using physical money into electronic money. No wonder now that the conventional transaction culture has shifted to a digital transaction culture. These two things, electronic money, and digital transactions are the sweet fruit of the existence of the fintech industry that can be enjoyed by everyone.

For consumers, fintech can help get better services, easier processes, and lower prices. For fintech players, the benefits are to simplify the transaction chain, cut operational and capital costs, and freeze information flow. Then for the country, fintech can encourage the transmission of economic policies, speed up the flow of money,

Fintech influence

Lots of influence has been caused by fintech on a global scale and it makes the development of fintech increasingly unstoppable. The most obvious influence is, of course, the matter of the easier and faster flow of financial transactions in various aspects. But besides that, the presence of fintech business has also made the growth of new types of business in Indonesia, especially for start-up companies.

Fintech Business Coverage

The fintech business world has a broad scope, not just a matter of buying and selling transactions. In addition, the fintech business has stimulated the emergence of new business innovations in the financial world that are increasingly facilitating human life.

At least, there are 7 fintech business scopes. The following explanation:

1. Payment fields, such as digital wallets, electronic money, transfers, or digital payments.

2. Investment fields such as Bareksa, an Investment Fund marketplace, and IpotFund, an Investment Fund supermarket.

3. The field of financial planning both from the line of financial education or personal financial planners

4. The financing sector (lending) is in the form of debt financing, crowdfunding system financing, and Peer to Peer (P2P) based financing.

5. Comparison of financial products (Comparison Site or Financial Aggregator).

6. The field of financial research is still very limited in its development.

7. Other fields such as Agent Network, Gold Marketplace, Capital Market, and Business Point of Sales (POS).