Benefits of Fintech:

1)Speeds up the Process: All processes are completed quickly with the assistance of fintech. For instance, it can take a long time to get approved for insurance or financing. With fintech, however, the procedure can be completed five times faster. It means that the procedures for which customers should indeed wait will be reduced and might even be completed within 24 hours.

2)Wide range of Financial Services: Fintech improves the health of financial institutions. This is because providing a variety of financial services and speed up procedures improves the performance of institutions. Profitability will also improve.  Besides that, by collaborating with banks, fintech companies can provide a wide range of additional services; the opportunities will only expand.

3)  Convenience: One of the benefits of using fintech is that it is convenient for customers. We live in a world where, no matter what we do, mobile connectivity is at the core of everything. Fintech will simplify the process and make it easier to use. No matter where you are, you can complete your transactions with a few clicks.

4)Transparent: Fintech companies manage their financial services in an open and transparent manner. When it comes to pricing, customers are aware of the total costs and are aware that there are no hidden fees, unlike traditional banking institutions. Some fintech companies offer pay as you go pricing, while others require customers to pay for the services they use.

(What is 'Fintech' and how is it changing financial products?)

 

According to Consumer Protection Outlook Report March 2023,

The Central Bank of Ireland works to ensure the financial system operates in the best interests of consumers and the wider economy. To guide the firms we regulate, we structured our expectations of firms under what we saw as the five primary drivers of risk for consumers of financial services in Ireland today across all the sectors we regulate:


(Central Bank of Ireland Consumer Protection Outlook Report 2023 2023)

Key Drivers of Consumer Risk:

  • The changing operational landscape:

In November 2022, we sent a Dear CEO letter to the companies we regulate to affirm our expectations for how businesses should treat customers in this more challenging economic environment and their duty to navigate this change in a way that puts customers' best interests at the Centre of their business decision-making. 

  • Ineffective disclosures to consumers:

As a result, regulated firms will need to be especially cautious and make sure that their information and suggestions are clear and is used to help consumers decide wisely in the specific scenario of this evolving economic landscape and the rapid pace of financial services innovation. Companies are also expected to be proactive in detecting new consumer concerns and to assist their clients in reducing those risks.

  • Technology-driven risks to consumer protection:

We observe a heightened risk of financial exclusion at a time when consumers are actively attempting to change their financial service agreements. In order to prevent new digital channels from actually restricting access to services through other channels, it is crucial to strike a balance between the advantages of technology.

  •  The impact of shifting business models:

In the context of investment products, this risk driver is particularly high, but it can also be significant in other contexts. Companies must make sure their product proper research considers all relevant aspects, such as risk-return profile, liquidity, expenses, and charges, and other necessary characteristics that could modify the nature of an investment product under certain circumstances.

  •  Poor business practices and weak business processes:

Here, we have confirmed two different issues. The first is when firms pursue strategies and use methods that are unfair to consumers or otherwise inappropriate, as was the case with the recently illegal practise of price walking in home and motor insurance. The second scenario is one in which insufficient or poor internal processes and controls negatively impact consumers. This has happened in situations when businesses lacked the necessary tools or procedures to cope effectively with a rise in customer demand for a particular product or services.

References:

·       (2020) Top Benefits of Fintech. Reliable Counter, January. Available at: https://www.reliablecounter.com/blog/top-benefits-of-fintech/ (Accessed: March 27, 2023

  • (2023) Central Bank of Ireland Consumer Protection Outlook Report 2023. rep. Central Bank of Ireland. Available at: https://www.centralbank.ie/docs/default-source/regulation/consumer-protection/consumer-protection-outlook-report/consumer-protection-outlook-report-2023.pdf?sfvrsn=db2d991d_4 (Accessed: March 27, 2023).

 

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