The widespread adoption of FinTech has driven many innovative financial services to ordinary people with access to a smartphone. This continuing success is attributed to the integration of Artificial intelligence (AI), data utilization, finance, information and communication technology (ICT), the Internet of Things (IoT), and real-world needs for better financial services for all. As such, the FinTech industry leads to new business models, applications, processes, products, or services that directly impact financial marketplaces and institutions, providing advanced financial services to consumers. These financial innovations are considered disruptive, as disintermediation, revolutionizing how existing firms create and deliver goods and services, addressing privacy, regulatory and legislative challenges, and simultaneously opening new and emerging doors for entrepreneurship and opportunities for inclusive growth.
FinTechs’ continuing disruption and inclusion
FinTech is a leader in leveraging information and communications technology (ICT), delivering financial services in data analytics, digital currencies, market infrastructure, payments, and settlements. While FinTech improves the efficiency of financial services, its [FinTechs] start-ups and solutions have both disrupted and enhanced the business operations of the banking, finance, and insurance industries. Moreover, FinTech also has advanced and developed financial innovations, creating inclusive finance.
Financial inclusion leads to the birth of the digital twin
Financial inclusion refers to the provision of financial services, such as sending or receiving funds, peer-to-peer lending, and crowdfunding. This inclusion enables the unbanked or underbanked to access financial services, making it egalitarian. As FinTech progresses with [personal] inclusive financial management, AI has gained momentum, transforming big data into significant value for businesses and individuals. Data that originates from both structured and unstructured data sources can be extracted, analyzed, and comprehensively presented to the user, creating new value-creation. One aspect of this AI advancement is the digital twin.
Defining the digital twin
Until recently, the FinTech catchphrase digital twin has been a buzzword, a hypothesis without a specific definition. This lack of definitive clarity about when, where, and how to use the digital twin tag has been challenging. In essence, the byword digital twin refers to a digital representation of an individual who can integrate and update any digital data virtually in real time. This integration generates advanced analytics for user feedback, recommendation, and alternative solutions. The [digital] twin implies the development of new tools, technologies, and methodologies for collating, storing, and analyzing data. These developments subsequently promote better decision-making and customer management. In effect, the digital twin is an avatar, a digital depiction of a physical object, a representation always looked at in its environment, linked with real-data sources.
An avatar, a simulacrum, a what?
The above words describe what a digital twin is. In this technological age, the term avatar represents the image that a person chooses as their embodiment in an electronic medium. In contrast, a simulacrum is an image or likeness, a digitalized mirage. In virtuality, it is immaterial to be verbose. The digital twin can increase competency using FinTech services, empowering engagement in knowledge creation and innovation processes as they evolve. Additionally, digital twins can potentially increase the efficiency of personal financial management for the individual.
As FinTech becomes more sophisticated, technology demonstrates its potential by preventing problems, cutting costs and time, improving efficiency, improving servicing, simplifying accessibility, encouraging innovation and knowledge, and achieving yet-to-be-realized objectives.
While digital twin technology is still in its infancy, identifying and resolving issues now is vital for the financial management and services industries, enabling further investment in the technology while capitalizing on data as the industry’s new value co-creation. This smartening of FinTech benefits all concerned as ICT solutions continue to advance digitalization and its emerging twin.