The difference between financial technology and traditional finance

The differences between them are different positioning, different modes, different advantages, different driving factors, different governance mechanisms and different ideas.

1. Different positioning: Financial technology is mainly aimed at related customers that traditional financial industries cannot provide or pay insufficient attention to. Through the effect and low cost brought by the information technology revolution, long-tail customers can obtain effective financial services in small transactions and market segments.

② Different modes: Both of them are using Internet technology, but there are differences in mode design. Traditional finance is to expand offline, strive to make better use of the original foundation and improve the convenience of services. Financial technology has adopted the mode of online to offline expansion, which has a strong advantage in tapping customers.

③ Different advantages: Traditional financial institutions have obvious advantages in capital, risk management, customers and outlets. Financial technology enterprises have many channels, better customer experience, faster business promotion, low cost and remarkable scale benefits.

④ Different driving factors: the traditional financial industry is process-driven, focusing on direct face-to-face communication with customers, and financial technology is a data-driven demand. Various structural information of customers can be used as the source of marketing and the basis of risk control.

⑤ Different governance mechanisms: Compared with traditional financial institutions, financial technology enterprises have added some governance mechanisms, which require secured mortgage registration, post-loan management and other governance mechanisms to gain trust through formulating rules and public supervision mechanisms.

6. Different concepts: Financial technology is an industry that uses scientific and technological means including artificial intelligence, credit reporting, blockchain and cloud computing to improve financial efficiency. Traditional finance has only three financial activities: deposit, loan and settlement.

Where is the application of financial technology?

Financial technology is based on a series of technological innovations such as big data, cloud computing, artificial intelligence and blockchain. Widely used in payment and settlement, loan financing, wealth management, retail banking, insurance, transaction settlement and other six major financial fields, is the mainstream trend of the future financial industry.