Do you know the meaning of the word, ‘FinTech’? The convergence of finance and technology created new opportunities, and changed our lives. Once you understand how it works, you can start using it. Let`s figure out what ‘FinTech’ is all about! .............................................................Ed
As Covid-19 expanded the untact market, there was a marked increase in non-face-to-face online transactions. According to data released by the Bank of Korea in September, the number of electronic payment agency services has increased by a whopping 32 percent, compared to last year. This phenomenon can be explained by FinTech, a hot potato in the financial market. So, what is FinTech? It is a term that merges finance and technology, and refers to a new financial service created by combining technologies, such as mobile, big data, and AI (Artificial Intelligence). The widespread use of smartphones has expanded the use of financial services that incorporate information and communication technology. FinTech is now indispensable in our daily financial life.
Financial consumers are familiar with FinTech through simple payments and remittance services. Through platforms such as Kakao Pay and Toss, payments and remittances can be made easily and conveniently through mobile devices. There is no need for complicated procedures such as authentication of public certificates or security cards. FinTech has also changed the mode of banking. Online banks that provide non-faceto- face financial services without having physical stores have emerged. In Korea, K-Bank first emerged as an online bank, followed by Kakao Bank. Consumers no longer have to go to the bank, but can simply transact online, such as opening accounts and being issued cards through non-face-to-face authentication. Moreover, it induced online professional bank membership by providing lower remittance fees and services, regardless of time and place compared to commercial banks.
With the development of FinTech, asset management and financial investment have also been simplified. Most people perform financial transactions at several banks, and not just one bank. A service has been created to ease the complexity of managing accounts at different banks. Users can manage multiple bank accounts at once and understand the flow of income and expenditure. Financial investment, which had been perceived before as difficult, has also become accessible to individual users. A robo-advisor is a compound word that refers to a robot and an investment advisor: Artificial intelligence that manages assets based on big data and algorithms. It offers personalized services at a low fee through online consultation. Commercial banks have introduced services using robo-advisers like Woori Bank’s Woori Robo Alfa and Shinhan Bank’s Solichi. Korea’s financial industry is known for its strong regulations and management. To foster the FinTech industry, the government should lessen its regulations. Also, security is a very important factor in FinTech. While FinTech offers convenience, we cannot ignore the danger of security threats. Many consumers are concerned about personal information leakage while using of FinTech services, and distrust safety devices. Security for FinTech processes must be managed more carefully. FinTech will further advance once the system is operated on the basis of proper regulation and effective security management.
Oh Joo-eun (ST Reporter)