Financial Technology and its Impact on Financial Services and Companies

Financial technology spring
2022

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Theme 1: Fintech and financial innovation/ disruption: .............................................................3
Theme 2: FinTech and Financial disintermediation....................................................................5
Theme 3: FinTech and the regulation of financial services and companies................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
Financial technology is referred to the combination of technology into offerings by
financial institution which in order to improve and automate the convey to customers. The term
financial technology can apply in innovation which result in how people transact business from
the forming of digital amount to bookkeepings. Fintech company is integrated technology and its
terms finance and technology refer to the businesses that uses the technology to enhance the
financial services. In further discussion, Its helps in company utilization, firm and consumers for
managing in appropriate way their financial operations, lives and processes by using generic
operating system that are use on analog. The report will discuss the literature review of financial
technology innovation, disintermediation as well as the regulation of financial services and
computers. In order to illustrate about the quantitative measurements of the evolution and
development of the Fintech company.
MAIN BODY
Theme 1: FinTech and financial innovation/ disruption:
In accordance with the Riyanto and Primiana (2018, p. 012104) technological innovation
in the financial services sector is rapid in recent years. The objective of Fintech has allowed to
consumers enjoy service platform as businesses and banks benefit from the efficiency and cost
savings of these innovations. The Legowo and Subanidja (2021,pp.94-99) also shows that the
business development in economic development on both levels which are macro and micro. In
Fintech modern financial service are enhance their interest from developing financial institution
and their aims to maintain the strengthen which leading roles in the financial service and provide
modern services of high quality at anytime as well as bank can benefit from building
relationships with Fintech.
On the other hand, Author stated that the development of financial technology is
expensive in modern days as well as its increase the competition of Fintech firms with banks. In
other aspects Romānova and Kudinska (2016) also stated that Fintech firms offer new services or
technology but bankers competitor have much lower costs and through the digital platform in
Fintech companies bank is exhibit the large volume of transaction which are sophisticated to
manage for the financial institution.

According to the Hodson (2021, pp.859-872) Fintech innovations provide greater
accessibility with internet which translate into an increase in banked population that helps in
apply for loan without any problem and it also has response times for applicants that range from
10 minutes to 48 hours. Fintech innovations also helps in the time optimization because all
processes can carried out from the internet and not need to go physical branch as well as proved
variety of services which helps to customers and get them satisfied. From the Schindler (2017)
point of view Fintech offers solutions ranging from analysing their profiles of credit applicants,
streamlining payments method, storing data in the cloud and many more. Also, represent that the
regulation technology or Regtech always help financial institution sector follow with the
regulatory requirements in technology. Regtech have an effective ways to improve the problems
and risk in the management of Fintech.
On the other side, Beck (2020) stated the disruption of Fintech service can be the lack of
physical branches because of digital innovation or social network in that aspects it is the problem
in he provisions of the service which are risk for the Fintech the barrier of physical meeting with
the clients. Nuyens (2019, pp.217-222) argued that disrupted is the regulations around Fintech in
the world are not perfect and there is possibility of fraud in the absence of regulations of Fintech
because the Fintech must be managed with versatility in regulatory environment and direct
through the costs involved in meeting which are corresponding as per the requirements.
According to Frame and Wall (2018) the Fintech company offer low costs transaction
and efficient banking services which based upon the Fintech that helps in efficiently transfer
payments and cut down the costs in cross border transfers situation. Cost reduction with which
most them intend to compete against traditional financial companies, is that extensive Fintech
offer lower commissions than banks. Chen (2018) investigated in that study that competition on
market share or strategic risk is rapidly increased in bank service to non- bank Fintech which
increase risk to profitability at individual banks. With the profit difference if Fintech new initiate
are able to use innovation which are effectively and convey less expensive services which are
helps in better meet customers satisfactions and their expectations.
According to Unsal and Rayfield (2019) Fintech need to maintain their risk management,
the high standard of safety and consumer protection aims are required in the banking industry
which need to be maintained in appropriate way. The improvements in security is created into
blockchain through encryption or code of the blocks as well as Fintech institution also providing