Global Journal of Commerce & Management Perspective
Open Access

Financial Innovations in Digital Marketing

Yongping Sun^{* *}Correspondence: Yongping Sun, Department of Economics and Management, Nanchang University, Nanchang, Jiangxi, China, Email:

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Description

The process of developing new financial products, services, or procedures is known as financial innovation. Advances in financial instruments, technology, and payment systems have all contributed to financial innovation. The financial services business has been transformed by digital technology, which has changed where we save, borrow, invest, and pay for goods.

While banking institutions continue to invest in mobile banking, Technology companies such as Stripe assist small businesses with online payments, while investment broker Robinhood aims to reorganize investing and finance. Consumers, borrowers, and enterprises also have access to a greater number of financial providers as a result of these advances.

• The process of developing new financial or investment products, services, or procedures is defined as financial innovation.

• These modifications can include new technologies, risk management, risk transfer, credit and equity development, and a variety of other advances.

• Crowdfunding, mobile banking technology, and remittance technology are characteristics of recent financial breakthroughs.

Technologies used in financial innovations

Machine learning and Artificial Intelligence (AI), predictive behavioural analytics, and data-driven marketing are examples of new technologies that will eliminate the risk of human error and habit from financial decisions. "Learning" apps will not only detect users' underlying patterns, but will also involve users in learning games to improve their habitual, unconscious spending and saving decisions. Fintech is also an early adopter of automated customer service technologies, using chatbots and AI interfaces to help clients with basic tasks while simultaneously lowering staffing expenses. Innovation is also being used to overcome fraud by using payment history information to detect transactions that are out of the ordinary.

Financial innovations refers to the incorporation of technology into financial services, organisations offerings in attempt to optimize their use and delivery to customers.

• It essentially works by lowering costs such organisations offerings and generating new markets for them.

• Startups in the banking business disrupt competitors by increasing financial inclusion and leveraging technology to reduce operational costs.

• Fintech finance is increasing, but there are regulatory issues.

• Fintech applications include, among other things, roboadvisors, payments apps, peer-to-peer (P2P) lending apps, investment apps, and crypto apps.

Applications of financial innovations

• Roboadvisors are programmes or online platforms that automatically invest your money for you, frequently at a low cost, and are accessible to the general public.

• Robinhood and perhaps other investment applications make it simple to purchase and sell stocks, ETFs, and cryptocurrency from your mobile device, typically with little or no commission.

• Payment apps such as Paypal, Venmo, Block (Square), Zelle, and CashApp make it simple to pay businesses and individuals online and in real time.

• Mint, YNAB, and Quicken SimpliFi are personal finance apps that allow you to see all of your accounts in one location, make budgets, pay bills, and so on.

• P2P lending systems such as Prosper, Lending Club, and Upstart enable individuals and small business owners to obtain loans from a diverse group of people who give microloans directly to the platform.

• Crypto apps, such as wallets, exchanges, and payment apps, securely store and exchange cryptocurrencies and digital tokens such as Bitcoin and NFTs.

• InsurTech is the application of technology to the financial industry. One example is the usage of gadgets that track our driving in order to change the auto insurance prices.

Regulations in financial innovations

As technology has become more interlinked into financial services processes, regulatory hurdles for such firms have risen. In some cases, the issues are caused by technology. Others see them as a manifestation of the internet industry's curiosity to disrupt finance.

For example, process automation and data digitalization render finance systems vulnerable to hacker attacks. Recent hacks at credit card firms and banks demonstrate how easily malicious people can get access to networks and do irreversible damage. In such circumstances, the most pressing concerns for customers would be the culpability for such attacks, as well as the exploitation of personal information and critical financial data.