Table of ContentsBenefits of Fintech for BanksPersonalized BankingFraud PreventionConclusionReferencesIn the age of Millennials where we are glued to our smartphones, our lives and daily routines have radically changed, and we have less time for ourselves. Consumers want immediate and fast transactions without making any effort. In this context, the role of traditional banks has been entirely announced by fintech. Fintech refers to the integration of technology into the offerings of financial services companies in order to improve their use and delivery to consumers. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the Original EssayEarlier, the functions of banks were limited to maintaining deposits, granting loans, and controlling verifiable deposits. People had to go into the bank and wait in long lines, just to deposit money. ATMs were later introduced to make it easier for customers. Similarly, transferring money between accounts or paying someone typically required a trip to the bank or access to a card reader to make a transfer through online banking, but with payment processors like PayPal, this has become a one-click job. To make it even faster, the Tap and Pay service has been introduced. Customers simply wave or place their contactless device on a point-of-sale device to make a payment. Australians made 325 million contactless payments in 2017, an increase of 26% from 2016. Additionally, mortgages were considered one of the most difficult banking functions due to lengthy processing processes. demand and strict regulation. FinTech mortgages have gained popularity by digitizing the process, transforming it from a slow, paper-based process to a faster, transparent and streamlined application process. For example, Athena Home Loans, Loans.com.au, Funding Pro. However, the financial technology industry boomed after the 2008 global financial crisis. When financial giant Lehman Brothers abruptly filed for bankruptcy on September 15, 2008, the financial world was shaken. People were losing their jobs, families were losing their homes, and most importantly, everyone was losing faith in the institutions that were supposed to provide financial support. The change in consumer mentality has created a demand that has provided opportunities for new players to join the market and offer better and more competitive services. New fintech services include third-party payments by non-bank digital providers, peer-to-peer lending, internet credit including microloans, internet banking and insurance, digital wealth management and credit ratings. Artificial Intelligence (AI) is creating the greatest technological revolution the world has ever seen. It refers to the development of machines or systems capable of performing complex tasks normally considered to require "intelligence" and therefore considered the preserve of humans. It enables a faster and more accurate assessment of a potential borrower, at a lower cost, and takes into account a wider variety of factors, leading to a more informed, data-driven decision. It is also effective in preventing credit card fraud. This system analyzes customer behavior, location and purchasing habits and triggers a security mechanism whensomething seems abnormal and contradicts the established spending pattern. It also helps in risk management, trading, personalized banking, process automation, etc. Recently, Commonwealth Bank unveiled a chatbot that it says uses artificial intelligence to help customers with more than 200 banking tasks. Called “Ceba,” the chatbot helps customers with tasks such as activating their card, checking account balance, making payments or getting money without a card. Blockchain can enable financial and other transactions to take place in seconds, not days, and significantly reduce infrastructure costs. . It is an encrypted and secure protocol for creating trust between contracting or transactional parties without going through a central authority such as a central bank, government or other agency. Blockchain underpins cryptocurrencies such as Bitcoin, Ethereum, Ripple, and many initial coin offerings. Cryptocurrencies use blockchain's decentralized ledger technology (DLT) to allow users to make secure payments and store value without needing to use their name or go through a bank or securities company. payment. like MasterCard or Visa. ILS enable peer-to-peer transactions without central clearing houses, central banks and without reference to a national currency. The dollar value of the 10 largest cryptocurrencies is around $150 billion, while UBS (FINANCIAL SERVICES PROVIDER) estimates that blockchain could add between $300 billion and $400 billion in annual economic value to the world. 'global scale by 2027. The rapid adoption of third-party payments has been enabled by technology, the proliferation of e-commerce and social media. It acts like a digital wallet and essentially replaces a physical wallet. Debit/credit cards are linked to the digital wallet and we can transfer money there. One well-known early entrant in this space is China's Alipay, which in 2004 launched electronic payment options on the e-commerce platform owned by its parent company Alibaba. Since then, applications geared towards mobile payments have multiplied while their use has increased considerably. According to one estimate, payments made through third-party processors reached over RMB 119 trillion (or approximately US$18 trillion) in 2016. Similarly, in Australia, 29% of people use services like PayPal. Mobile banking apps are different from payment apps because it basically means transacting through one's existing bank account. People can check their balance and make and receive payments with just one click. Australian banks like Commonwealth and ANZ offer such services to their customers. Banks also plan to offer apps that people can use to make ATM withdrawals instead of using cards. According to Fusion, some also offer biometric security and the “Countries” of Apple, Google and Samsung to really meet the expectations of their customers. According to a Roy Morgan study released in January, mobile banking is not only the fastest growing way to bank, but it also has the highest levels of customer satisfaction (89.3%). ). Crowdfunding involves using small amounts of capital from many individuals to finance anew business venture. It uses the ease of access to large networks of people through social media and crowdfunding sites to bring investors and entrepreneurs together, without any financial intermediaries. Websites like Kickstarter and Indiegogo attract hundreds of thousands of people hoping to invest in the next big thing. This site has funded over 160,000 projects, with over $4.2 billion pledged across Kickstarter projects. Peer-to-peer (“P2P”) lending also grew rapidly until recently. After the global financial crisis, banks were reluctant to lend to small businesses. Therefore, in order to eliminate middlemen, a P2P platform was created to collect information, assess credit, facilitate information exchange and connect borrowers and lenders. These platforms are financed mainly by individual investors. Credit Karma and Kabbage are good examples of such Fintech companies. The value of loans provided through P2P lending platforms in Australia is expected to reach $22 billion and the total addressable market to reach $87 billion over the next five years. Cardless cash is a feature offered by some Australian banks that allows customers to withdraw money from an ATM using their smartphone rather than their debit card. This feature is a safe and convenient way to access cash when we leave our wallet at home. The user has access to cash 24/7 and can withdraw up to $500 every day. The Commonwealth Bank and Westpac are among them. Benefits of Fintech for Banks Paving the way for a win-win partnership. Competition between banks and new entrants could give way to collaboration within the Fintech ecosystem. In such a case, both parties should benefit. From the bank's perspective, fintech lacks IT security and regulatory certainty, while fintech believes that banks can be difficult to work with due to differences in management and culture as well as differences in operational processes. become faster, more accessible and more profitable. Intelligent character recognition helps automate a variety of mundane and time-consuming tasks that previously took thousands of man hours and inflated payrolls. Using robotic process automation for high-frequency, repetitive tasks eliminates the possibility of human error and allows a financial institution to refocus the efforts of its workforce on processes that require human involvement. Ernst & Young has reported a 50-70% cost reduction for these types of tasks. A leading financial company, JP Morgan Chase, has been successfully leveraging robotic process automation (RPA) for some time now to perform tasks such as data extraction, comply with Know Your Customer regulations, and capture insights. documents. Small banks are ready to embark on the adventure. The FinTech bandwagon. In the aftermath of the financial crisis, many local banks were left behind the rest of the competition. And it is high time that they mobilize to revive themselves and find their place in the sun. Several American banks, Evolve Bank & Trust, Cross River, Sutton Bank, have established solid relationships with startups. While start-ups reach out to their customers and benefit from regulatory protection, incumbents are conquering the mobile banking app market. Bank