Financial Technology
The term "fintech" is an amalgamation of the words "finance" and "technology." Although it is a broad term that can refer to a variety of things, it broadly refers to the evolution of an industry in which new technology use-cases are developed and deployed to streamline more traditional-looking finance functions.
Fintech is an acronym that combines the words "finance" and "technology."
While many flashy, emergent technologies have made headlines, fintech has a wide range of relatively traditional applications.
Fintech affects many of our daily lives without our knowledge.
Fintech essentially works by unbundling such organisations' offerings and generating new markets for them.
Companies in the banking industry that employ fintech have increased financial inclusion and reduced operational costs.
Fintech applications include, among other things, robo-advisors, payment apps, peer-to-peer (P2P) lending apps, investment apps, and crypto apps.
Fintech Landscape
Cryptocurrency
Cryptocurrency (Bitcoin, Ethereum, and so on), digital tokens (for example, non-fungible tokens, or NFTs), and digital cash. These frequently rely on blockchain technology, a distributed ledger technology (DLT) that keeps records on a network of computers but does not have a central ledger. Smart contracts, which use code to automatically execute contracts between parties such as buyers and sellers, are also possible with blockchain.
Open banking
Open banking, a concept that argues that everyone should have access to bank data in order to build apps that form a network of connected financial institutions and third-party providers. Mint, an all-in-one money management solution, is one example
Insurtech
Insurtech, which strives to simplify and streamline the insurance industry through the use of technology.
Regtech
Regtech, which aims to assist financial service organisations in meeting industry compliance standards, particularly those pertaining to anti-money laundering and Know Your Customer protocols to combat fraud.
Robo-advisors
Robo-advisors, such as Betterment, use algorithms to automate investing advice in order to reduce costs and make it more accessible. This is one of the most well-known and widely used applications of fintech.
Unbanked/underbanked services
Unbanked/underbanked services aimed towards disadvantaged or low-income individuals who are disregarded or underserved by regular banks or mainstream financial services providers. These apps encourage financial inclusion.
Cybersecurity
Information security. Because of the prevalence of cybercrime and the decentralised storage of data, cybersecurity and finance are inextricably linked.
Chatbots
AI chatbots, which gained popularised in 2022, are yet another example of fintech's growing influence in everyday life.