What is Fintech?

April 18, 2020

Fintech: A term used to refer to innovations in the financial and technology crossover space

Companies or services using the internet, mobile devices, software technology or cloud services to provide financial services to businesses or consumers
Fintech is all around us in 2020, whether purchasing a coffee at local coffee shop, managing the finance or transferring amount to a friend $8 for food on Venmo.
Fintech has been used for many of the newest technological developments – from payment apps like PayPal or Venmo to even cryptocurrency
Earlier fintech referred to technology involved in back-end systems of banks or financial institution, but now its connected to many services like to manage funds, trade stocks, pay for food, buy online, manage insurance etc.
According to the forbes report, for the estimated near 2 billion people worldwide without bank accounts, fintech provides a nimble option to participate in direct access to their financial services through easy-to-use technology.

Fintech Examples

Crowdfunding platforms allow internet and app users to send or receive money from others on the platform and allows individuals or businesses to pool funding from a variety of sources all in the same place.
Kickstarter, Patreon, GoFundMe and others illustrate the range of fintech outside of traditional banking.

Cryptocurrency and blockchain are hallmark examples of fintech in action.
Cryptocurrency exchanges like Coinbase and Gemini connect users to buying or selling cryptocurrencies like bitcoin or litecoin.
Services like BlockVerify help reduce fraud by keeping provenance data on the blockchain.

Technology sophisticated services have emerged that allow consumers to exchange money and payments online or on mobile devices – including popular payment app Venmo.
Apple and Alibaba got in on the mobile payment business with Apple Pay or Alipay.

Insurtech (as it’s been so-called) has come to include everything from car insurance to home insurance and data protection.
Insurtech startups are increasingly attracting funding, with insurance startup Oscar Health securing some $165 million in funding in March of last year – at a $3.2 billion valuation, according to CNBC.
Personal finance company Credit Karma was valued at $4 billion, according to Forbes in 2019.

Robo-advising provides algorithm-based asset recommendations and portfolio management that have increased efficiency and lowered costs.
Advanced technology that can analyze various portfolio options 24/7, financial institutions have adapted to offer online robo-advising services – including the likes of Charles Schwab and Vanguard.
Inexpensive and low-minimum apps like Robinhood or Acorns, investing from anywhere with any budget has never been easier.

Fintech revolution prompted the development of financial services apps, consumers can easily and efficiently keep track of their income, expenses and other budgeting tools that have revolutionized the way consumers think about their money.
Budgeting apps like Intuit’s help consumers track their income, monthly payments, expenditures and more – all on their mobile device.

PayPal has long been a favorite on the market, even despite recent weak forecasts for 2019. In fact, PayPal racked up some 267 million users worldwide as of the end of 2018 – adding some 31% more accounts for the year.
Visa is considered in the fintech space now, and analysts seem bullish on the stock’s potential given the company’s increasing shift toward plastic and technological advances.
Alibaba is consistently a big fintech stock to know – and potentially own. “Alibaba is years ahead of any competitor in driving digital commerce forward,” said MKM Partners analyst Rob Sanderson last

B2B (Business to Business)

Businesses can easily get loans, financing, and other financial services through mobile technology.
Cloud-based platforms and even customer-relationship management services like Salesforce provides B2B services that allow companies to interact with financial data to help improve their services.

B2C (Business to Client)

Cash apps like PayPal, Venmo and Apple Pay all allow clients or customers to transfer money via the internet or mobile technology, and budgeting apps like Mint allow customers to manage their finances and expenses.