FinTech Status in the Global Market: Challenges and the Future

Introduction

Financial technologies, commonly referred to as FinTech, have become indispensable to modern society. They offer substantial advantages that have made them a daily routine for many people. The implementation of these technologies has empowered individuals with electronic devices to carry out various functions, such as transferring funds, executing online payments, saving money, and investing their capital.

Financial technologies have been a part of the industry for several decades, and their presence has become increasingly relevant in modern society. In fact, the majority of individuals who own electronic devices have access to apps or functions that allow them to engage in financial transactions, such as moving money, making purchases, saving, or investing. For businesses of any size, failure to support or utilize financial technology may result in missing out on a substantial portion of the market, as a growing number of people rely exclusively on such software for their financial needs. As such, implementing access to financial technology has become a necessary component for businesses to remain competitive in the market.

The FinTech industry comprises a diverse range of services and products, including platforms for lending and financing, payment and transfer solutions, wealth management and investing tools, and insurance products. Emerging technologies such as automation and blockchain have accelerated the expansion of FinTech, which has disrupted established financial organizations and systems. Although FinTech has offered many benefits, such as increased efficiency and speed of transactions, there are also potential risks associated with its use. These risks range from theft of personal information to cyber-attacks and financial loss, which can lead to skepticism about implementing FinTech. Therefore, it is essential to investigate whether the benefits of FinTech outweigh the risks.

The objective of this research is to examine the advantages, risks, opportunities, disadvantages, and potential threats of FinTech to determine its effectiveness in the long run for businesses, society, and individuals. This information is necessary to facilitate better performance of financial technologies in communities and companies, build a more trustworthy relationship with people, and provide businesses with easier ways to operate. The research has a global scope, targeting companies and users worldwide, and does not consider additional variables, such as people's economic situation when acquiring this technology and their ability to invest in their security.

This chapter was written with ethical principles in mind. The methodology used in this research comprises three aspects: approach, purpose, and philosophy. A deductive approach was employed, as the growing impact and knowledge of FinTech have created a shift from traditional banking, and the exponential growth of businesses implementing FinTech is noteworthy. The central question of this research is how the advantages or challenges of FinTech affect its effectiveness. A hypothesis was formulated, stating that FinTech is effective in businesses as its advantages outweigh the negative aspects. The hypothesis was evaluated based on a theoretical framework, findings within this research, and a conclusion.

The research purpose has two categories: exploratory and reporting. The exploratory aspect investigates issues and general qualities of a known circumstance, which aligns with the deductive approach, is low-cost, and will be useful to future researchers in understanding FinTech's effectiveness. The reporting aspect involves the use of secondary data from previous researchers for the findings and analysis. The research philosophy adopted is a mixed approach, as the data to be analyzed will be both statistical and descriptive, making it more efficient given the time limitations and nature of the financial topic.