What is fintech?
Date: April 23, 2021
Fintech, simply put, is the merging of finance and technology. Technology that improves or builds financial services like PayPay, Venmo or Kickstarter. It is a term that encompasses a large range of businesses, products and services in the financial and payments industry. In principle, as long as a company uses the internet, mobile devices or software to provide financial services, it’s fintech.
Technology that used to be reserved for banks and trading firms has now evolved and is continuing to develop for the general public. With the financial crisis in 2008 that caused banks to lose their good reputation, people were in search of ways to have more control over their money and fintech companies have offered those solutions. In fact, a 2020 survey concluded that only 14% of consumers went to their banks for financial advice after an event that had an impact on their finances. Instead people are turning to fintech companies that are offering similar services as banks but with the ease of being mobile.
But services that mimic traditional banks are not the only aspects of fintech that consumers are turning to. As mentioned before, fintech is a very broad industry and branches out into several areas. To name a few there are:
- Blockchain and cryptocurrency
- Investments : Robo-Advising and stock-trading apps
- Personal finance
- Price comparison marketplace
In other words fintech has become a part of daily life for most people. As of 2019, 64% of consumers were using two or more fintech services or platforms and $137.5 billion was invested in fintech businesses that same year. It is safe to say that fintech has taken the world by storm and shows no signs of stopping. Technology is constantly evolving and is changing the financial world rapidly.
The innovations offered by startups combined with the services provided by traditional banks are constantly improving and changing the financial landscape. For the consumer payments are made easier, investing is automated and handling personal finances can be arranged from the comfort of one’s own home. In other words, fintech is the future of finance.