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The use of technology in the financial sphere is becoming the backbone of major industries. Technology is also fast becoming the go-to for secured and efficient financial services and products. Thus, fintech (in which crypto & blockchain reside) is gradually becoming one of the major backbones in boosting economic growth and expanding financial functionalities.
There have been a lot of studies and research on the impact of fintech on various countries concerning their financial market. In a recent study, there were some fascinating discoveries in the results of a detailed report from one of the biggest global financial organizations, the International Monetary Fund (IMF).
The top of the study’s intriguing conclusions by the IMF basically revolve around cybersecurity.
Cybersecurity and General Data Protection
Cybersecurity and the general protection of citizens’ data in each country is one of the most interesting factors being considered in this study. Different governments are working hard to get a strong grip on pouring of private data and information within their cybersecurity space. To this cause, most governmental jurisdictions have frameworks specifically put in place to protect financial systems.
About 79% have identified cyber risks in fintech as one of the major problems in the financial sector. Also, a third of the survey’s participants have identified as a threat the interdependencies associated between networks, systems, and processes which exists between the financial sector. The concentration risk that exists between the top technology providers has been pointed out as the source of the threat to the financial infrastructure.
In high-income economy, above 80% have reported some follow up of cybersecurity related risks which are in some ways related to third-party fintech service providers.
Asia Is Currently Leading in the Fintech Industry
China is usually named the global leader when it comes to fintech for obvious reasons. In the early years of development of the technologies used in finance, the Chinese government support of the development of the fintech industry caused the emergence of China as one of the commanding current world leaders in both blockchain and crypto. Also, in countries like India, increased use of mobile payment and money transfer have driven the wide use of fintech.
Also discovered in this study is the huge gap that exists between the use of fintech in urban and rural areas. There was an obvious difference in use between the rich and the poor as well.
Innovation In Fintech From Sub-Saharan Africa
This study showed that this region of the world is a global leader in mobile money accounts per capita as active and registered accounts are used regularly. Up to 10 percent of the GDP in transactions is made possible through this mobile money usage.
As compared to the seven percent contribution to the GDP in Asia and less than two percent in other regions, the adoption and innovative usage of the mobile money financial service is shaping the African region.
Fintech Adoption in Europe Is Not Unified
The different modernization of data policy frameworks is helping to clarify the obligation of the data-driven economies. Considering the high mobile and internet access, the potential of fintech service providers is very high.
However, there are issues with different regional finance agreements. There is also a considerable gap between significant fintech investments in the United Kingdom and in other Europe countries when it comes to fintech financing and innovation implementation.
Cryptocurrencies Are Fast Becoming a Reality
The use of cryptocurrencies is fast becoming a reality, and there are moves by many states’ central banks to back them. This, of course, is aimed at breaching financial gaps and make transactions faster. But even then, these giant strides are still in the early stages as there are just four pilot payment systems that have been reported.
Fintech is increasingly turning into one of the basic backbones of any major economy. This is obvious when considering fintech contribution to the GDP of different regions and its use in the financial sectors. Although there are still reservations when it comes to cybersecurity, effective functionalities far outweigh the drawbacks. It is important to mention that the International Monetary Fund itself has been experimenting with fintech innovation recently.