Technology has always proven to be a powerful tool for humanity. Across all industries, technology has improved the speed and accuracy of manufacturing and delivering services to end users. This essay focuses on digitalization in the financial sector, the overall role of financial markets within economies and how Fintech has played a catalytic role in the evolution of financial markets, while also examining some downsides. Digitalization has enabled real-time connection of everyone working in the financial sector. Evolving from traditional banking methods, new savings and investment vehicles have integrated the financial market globally and made the allocation and investment of funds a very rapid process. Technological progress stimulates this mechanism. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Financial markets play an ever-increasing and crucial role in our economies, greatly facilitated by the user-friendliness of these technologies. In its simplest definition, financial markets are markets for the allocation of funds from savers to investors. The financial system plays a key role in an economy by encouraging savings and facilitating economic growth, through effective and efficient transfer of funds. The payment function, connecting lenders and borrowers, risk management and management of household financial affairs have made the financial system a backbone. to integrate the economy by meeting and matching people's financial needs. Financial technology facilitates these, supported by fast and efficient processes. This has led to rapid interconnectivity of most financial markets spread across the world. For example, a retail investor located in, say, India, can invest in real time on the Nasdaq, with just a few clicks. The technologies used and applied in the financial services sector, mainly used by financial institutions themselves downstream of their activities, are most commonly referred to as Fintech. Fintech represents technologies that disrupt traditional financial services, including mobile payments, money transfers, lending, fundraising and asset management. The secure place of Fintech in the financial system can be seen from the benefits it has brought to the financial markets: Personalization of financial services: offers personalized services according to consumer preferences. Dynamic personalization: An example of this can be seen in the case of insurance policies, where there is an inherent moral hazard from the perspective of the insured. In such a case, smart contracts are used to adjust insurance costs based on the behavior of the insured. By providing tailored services to customers, the overall experience they get from those services is improved. Transparency: According to Callum Sinclair, Head of Technology, “Millennials love interacting with social platforms, but when it comes to their money, there is still a trust deficit. Today, everyone is aware of their rights as a consumer and demands a fair and transparent financial system. Fintech brings together products, services and data that provide insights into product choices, coverage and pricing and subsequently increase transparency across the system. Providing support and guidance: navigating the complex mechanics of the systemfinancial can be difficult for end users. Through the use of artificial intelligence (AI) and big data analytics, Fintech helps consumers in a cost-effective manner. Speed ​​and flexibility: High-volume trading has been made possible by computers that instantly buy and sell securities. As a result, the period during which the owner held the securities was reduced to a mere blink of an eye. Fintech has had a clear impact in the financial services sector, but we know that efficiency in one sector of the economy will ultimately contribute to the development of the economy and society. One of the major impacts of Fintech on the economy is in the form of financial inclusion. When people in developing countries gain access to financial services through Fintech, they will have opportunities to expand businesses such as e-commerce and online learning, which are currently hampered by limited access to payment services. In this way, Fintech should contribute to economic development. As Shepard Fairey says, “There is good and bad in everything.” Although Fintech has had a considerable impact on the financial and economic sector, it has unavoidable drawbacks. Lack of security: Businesses face serious cybersecurity challenges, including threats that have the potential to turn into massive breaches affecting millions of customers around the world. As reported by Equifax (Consumer Reporting Agency), in July 2018, more than 143 million accounts were compromised in a massive data breach, in which hackers stole names, social security numbers , phone numbers and other vital information of account holders. By its nature, FinTech involves communication between a wide range of connected devices that use unique software, often with different levels of security. Hackers can take advantage of this lack of uniformity by illegally accessing personal information stored across the network and endangering the personal security of unsuspecting people. The security breach associated with Fintech is one of the main reasons why investors and users of financial markets should be discouraged. to use such technology. However, as the industry continues to evolve, cybersecurity specialists are revisiting conventional security models and reshaping Fintech to make its security foolproof and ensure complete data privacy, thereby gaining consumer trust and catalyzing the adoption of Fintech. Keep in mind: This is only a sample.Get a custom article now from our expert writers.Get a custom essayIn conclusion, I believe that the large number of positive factors of Fintech and the major improvements it can bring to the financial system and economies in general far outweigh the downsides associated with it. A relevant quote from Steve Jobs that “Innovation is the ability to see change as an opportunity, not a threat” fits this topic perfectly. References Bernard Marr, 2017. The Complete Beginner's Guide To FinTech Everyone Can Understand, sl: Forbes. Catherine McGuinness; Paul Merrey, 2017. Microsoft Edge. [Online] Available at: https://assets.kpmg/content/dam/kpmg/uk/pdf/2017/10/value-of-fintech.pdf Darskuviene, V., 2010. Financial Markets, sl: sn Elsinger, H., ndGarber, J., 2017. Equifax plunges after announcing massive security breach. sl:Markets Insider.Helmut, E. et al., 2018. Digitalization of financial services and finance).