September 30, 2022

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How Data Protection Is Changing Fintech Industry

The Fintech industry is robust. It is projected that global financial technology will be valued at over $300 billion by 2026. Market Data Forecast projects the value to grow at a compound rate of 23% or thereabout in the next five years.

Finance And Technology

Fintech is a combination of solutions in financial services and technology. Inventions in this space have modified and changed how the global industries operate. They limit the business space and improve customer experience by focusing on the client, ensuring the customer is satisfied rather than overlooking profits.

The space has grown into a reliable industry streamlining the global business platform by modifying business understandings. The financial technology industry provides solutions in e-commerce, cash transfer, wealth management, banking, among other sectors. This business model replaces the traditional financial services and changes how people transact.

Before the Fintech revolution, merchants traveled around the globe with tons of cash and merchandise. Today John, a trade-in Nairobi, Kenya, can easily buy products from manufacturers in any part of the world, set an e-commerce platform account, sell products to clients in the US, and receive payment electronically via a mobile wallet or straight into his account. That’s the beauty of Fintech.

Data And Fintech

Fintech companies hold the most valuable information. There is a lot of data in the global financial space worth billions of dollars. This data needs to be protected for people and businesses to be safe from exploits. Companies operating this industry invest billions of dollars in creating high-tech solutions hence safeguarding their business and customer information.

These service providers capitalize on user experience to keep the business going and have incorporated other advancements to ensure data is protected at all costs. Players combine other advanced technologies like AI and machine learning to ensure that their systems have top security that will keep critical data from getting in the hands of swindlers.

For instance, Financial technology providers use AI through mobile applications to teach users financial behaviors and perhaps their locations. These data are collected through the financial service applications that users interact with on mobile devices. This data is vital to fintech companies and helps them predict potential human behavior, plan for future products, and make critical business decisions. Words are not enough to tell how data is vital to this industry, but the big question is what happens when this data gets to the wrong hands.

Billions of dollars and the lives of millions of people are at risk if such data is compromised. Regulatory bodies monitor and ensure that private information is not misused by companies to protect the users. Such authorities provide, implement precautions to facilitate ethically and lawfully handling of data. In the UK, the Financial Conduct Authority is the body in charge of ensuring Fintech companies comply, the Data Protection Act 2018.

Regulation in financial technology has not brought serenity in the industry but has also given room for the invention of new technologies that are keen on protecting data and user privacy.

https://www.benzinga.com/fintech/21/10/23425600/how-data-protection-is-changing-fintech-industry