Financial Innovation

Reviewed by Apoorva | Updated on Sep 28, 2020

Introduction

Financial innovation is the process of creating new products, services, or processes related to the finance sector. They occur with the advancement in financial instruments and payment systems with time.

Understanding Financial Innovation

Financial innovations are made in the lending and borrowing of funds. The term can be seen in the light of various spheres of the financial system such as equity capital, remittances, mobile banking, and many more.

Investment crowdfunding began making the process of raising equity capital more democratic. It has eradicated the belief that only privileged few can invest in early and growth-stage companies. Now, individual retail investors can invest in projects according to their interest. Such individual investors receive shares of the company they have invested in.