financialtreat – will explain the Tips to Become a Fintech Investment Banking which you will get in the following article. let’s look at this article carefully!
Fintech Investment Banking or Peer to Peer Lending is now the choice of many people who want to invest their money in the hope of getting large profits. Indeed, in recent years, precisely since internet technology has become more sophisticated, Financial Technology (fintech) has emerged and developed. All financial transactions, ranging from payments, saving, and investing can be done digitally.
Since then, the digital-based fintech investment banking system has grown rapidly because it has succeeded in grabbing public attention. This system can not only be used by those who are in need of funds, but also for people who want to invest their money in the form of loans. This digital-based loan system is believed to still grow so that it can be the right investment land.
Understanding fintech investment banking
Fintech investment is a system of investing money or capital by utilizing financial technology, especially digital-based. Currently, people can invest their money in the form of mutual funds, stocks, deposits, gold, to become lenders in peer to peer lending digitally. All investment processes are carried out and controlled by all parties involved only armed with smartphones and the internet.
For example, in peer to peer lending, the manager or intermediary only needs to create a digital platform that becomes a meeting place between investors or lenders and creditors or borrowers. The advantage in this system, lenders will get a higher return than the funds they lent. While the benefits for creditors, the terms and process of lending are much easier and faster.
Tips to Become a fintech investment banking
Seeing the development of the digital-based financial system in Indonesia today, it is not an exaggeration to say that fintech investment has a bright future. Anyone who invests their money in this area definitely has a chance to make huge profits.
But of course it is not as easy as imagined, it needs a detailed introduction and careful planning, because fintech investment in Indonesia or in any country still has a considerable risk if not careful.
In order for financial technology benefits for investors to be optimal, there are several tips that are important to know before deciding to invest in fintech. If these tips are done well, the possibility of the risk of occurring becomes smaller or even disappears altogether. Some things that must be considered in fintech investment are as follows.
Spread Investment to Various Loans
One of the efforts that can be made to reduce the risk of losses that occur in fintech investment is to spread investment. For example, if you want to invest as a lender, don’t give all the funds you have to one lender or borrower because the potential loss becomes very large. It’s better to spread the funds you have to several creditors, that way, the potential loss becomes smaller and the potential profit increases.
Don’t Use Savings to Invest
Separating savings money and investment money is one of the efforts to reduce risks that may occur in fintech. In peer to peer landing investments, for example, funds that have been invested cannot be taken back until the creditor returns or installs the loan.
So it will be very dangerous if the loan given comes from savings money. Instead of taking savings for other purposes, it is better to prepare a new savings post that is allocated to invest in fintech.
Don’t Bet on Fintech Lending Funding
Fintech investment is the process of investing funds to get multiple profits, so it is too risky to make investment only as gambling. Prepare all the data needed before investing, do in-depth research, learn very well the field or party you want to fund. That way, you can be more confident when deciding to invest funds into a fintech field or to creditors.
Invest with Full Confidence
After understanding every possible risk and preparing a strategy to anticipate it. The last thing to do is to convince yourself. Investment will be much better when run with confidence so that whatever happens will not be a problem.
Risk of fintech investment banking or P2P Lending
As mentioned earlier, investment in fintech, especially fintech lending, has various risks that if not properly recognized can cause losses. But on the contrary, if risks in the investment world are well recognized. All the strategies needed to anticipate them can be prepared from the beginning.
In addition, by understanding all the risks of fintech companies that may occur. A reliable investor will actually be able to take advantage of these risks into an advantage. Here are some fintech investment risks that need to be considered and studied:
The quality of managers is still limited
One of the risks that may be faced by financial technology companies. Especially in the field of P2P lending in Indonesia, is a relatively new age so it is difficult to determine managers who have quality from managers who are not qualified.
While the position of the manager is very vital in this field. It is the manager who will bring together potential creditors with potential investors. Instead of profit, you can actually get a big loss if you choose the wrong manager.
Investors bear the full extent if creditors are delinquent
In p2p lending, investors must be prepared to bear various risks. Including when creditors are delinquent and even default on credit. In this condition, investors must be prepared to lose all the funds they lent without compensation from the manager. This is one of the most striking differences with being a lender through a bank.
Investors Assume Operational Risk
In addition to bearing the risk of creditors defaulting on loans. Fintech startup investors must also be faced with operational risks from the manager. The first risk is that irresponsible managers may run away or misuse investment funds. The second risk is that the manager may go bankrupt. That is why, checking the credibility and performance of managers is a very important first step.
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Investors Can’t Attract Investment Halfway
Another risk that needs to be considered carefully when you want to invest in p2p lending is that funds that have been invested cannot be taken “in the middle of the road”. The money can only return to the hands of investors when the creditor successfully pays off the credit.
That is why, when deciding to invest in this field. The funds invested must come from special funds that are allocated for investment purposes in the field of capital lending. The development of fintech investment banking in Indonesia is indeed quite promising.
In just a few years, there has been a significant increase in the number of investors. Continuous system, technical, and regulatory improvements also help investment in fintech become better and more profitable. Well, that was a little explanation related to Fintech Investment Banking. Hope it is useful.