Beginners’ Glossary Of Fintech Terms

Look, starting out is always scary, and more so when it comes to saving and investing your hard-earned money. But you know what helps? Knowledge. Which is exactly what we’re here to share with you. Here are the five key terms any young investor needs to know the meaning of –

1. Fintech  

Two words – financial and technology – come together to create this buzzword in the finance sector which has simply put – been taking over the world of investors.

Fintech refers to that space within the financial sector that is responsible for the digitization and automation of traditional and auxiliary financial services.

This means that fintech equips you, the (budding!) investor, with the power to save, invest, transact – all with the simple click of a few buttons on your phone. To know more about why exactly fintech companies are a young investor’s best friend read more here.

2. Auto-Pay 

As the name suggests, auto-pay refers to an automated process that allows you to pay balances, fees, and bills, and carry out other such scheduled transactions in a timely manner automatically, instead of asking you to choose to make a payment each time it is needed.

The Deciml App uses auto-pay to make your Round-Up and Daily Deposits – well, automatic. It is a simple, secure, and efficient method to keep up with your payments (or investments!) without having to really do much (or anything) to facilitate them.

3. Data Encryption

This is an important one. There are a lot of apprehensions when it comes to online transactions and investments concerning your money.

This is where data encryption steps into the picture like a guardian angel! Simply put – data encryption is a process through which your valuable information is encrypted from plain text to ciphered text – making it impossible to access without a decryption key.

Too many heavy words together in one sentence? Worry not – we have given a more elaborate explanation of data encryption here. But the important thing to know is that this is a security process that is indispensable to the world of fintech.

4. Micro-investing 

When you first start earning, it is hard to save large sums of money to allocate to your savings and investments.

So, what is a young investor to do? Micro-invest of course! Micro-investing gives you the option to invest sums as small as ₹1 – so instead of saving first and investing later, you are able to save and invest at the same time, right from day 1! Deciml App’s Round-Up investment is in fact a form of micro-investing, wherein a round-up amount is invested for each online transaction you carry out.

It’s simple.
It’s quick.
It’s efficient.
And it’s – dare we say it – necessary.

In fact, it is exciting to note that, “An average user on Deciml is currently investing around Rs 1,200 or more per month simply through roundups” (Financial Express). Didn’t we say it was simple and efficient?

5. Account Aggregator 

An Account Aggregator (AA) is an RBI-regulated entity that helps investors digitally access and share their information from one regulated financial institution to another.

Eight major banks are a part of the AA network in India. These include “Axis, ICICI, HDFC, IndusInd Bank, State Bank of India, Kotak Mahindra Bank, IDFC First Bank, and Federal Bank” (Mint). Today in India, the financial system can be challenging, if not frustrating, for an individual. Notarising documents, filling out forms, scanning and sharing copies of bank statements – there’s simply a lot to do.

The AA network has been put in place to eliminate the most outdated procedures with safe and efficient digital financial processes which everyone can access on their smartphone. It has proven to be particularly helpful for money management and credit services.

And that’s five! You can put your pens down now – we aren’t going to test you after all. But, it is important that you keep these terms in mind. Not knowing exactly what something means in the world of finance can cost you dearly. So, ask questions, trust reliable sources only, and stay curious to stay ahead of the curve in this space.