Fintech combines the words "financial" and "technology." It is a relatively recent and often unclear term that applies to most emerging platforms and services that aim to deliver financial services in newer, faster ways than traditional ones.
The word “fintech” appeared and became widely used in the 21st century. The term was initially used to describe the technology employed at the back-end systems of solid financial institutions. However, fintech includes different sectors and industries such as education, retail banking, fundraising, nonprofit, investment management, etc.
It describes various financial activities, such as funds transfers via an online bank, depositing with your smartphone, filling out online applications in your digital bank's app, raising money for a business startup, or managing your investments on the go. Generally these services are completed without visiting the physical location of a particular institution. According to EY's 2017 Fintech Adoption Index, one-third of consumers use at least two or more fintech services and are aware of fintech as a part of their daily lives.
Examples of FinTech
You may also use fintech apps daily without considering the company a “fintech”. Primarily you can divide fintech companies into several groups. The most prominent examples of fintech are Banxe, Revolut, Nuri, N26, Wise, etc.
Cryptocurrency & Blockchain
Blockchain solutions reduce forgery by keeping original data on the blockchain. Crypto platforms connect users buying or selling cryptocurrencies such as Bitcoin, Ethereum, etc. and help them turn those into fiat assets. For example Banxe, where you can easily exchange your crypto with one of the lowest exchange rates on the market - 0,75% per transaction.
With consumers looking more toward financial wellness, many financial institutions are adopting a mobile banking approach. With the rising demand for digital banking among clients, most banks now offer some mobile banking capability. Several digital banks proceeded to an entirely online presence and do not have any offline branches.
Trading and Investment
Trading and investing have improved with the adoption of FinTech. Traders can now run large amounts of data through algorithms and identify trends and risks. Information from big data is often unstructured and indistinct without the help of AI technologies. These technologies can sift through complex datasets and extract insights from data in seconds.
Mobile payments, Digital Lending and Credit, Insurance, Trading, and Banking as a Service (BaaS) actively use the capabilities provided by fintech.