If you are confused about Fintech’s definition and what it actually means, then you are at the right place! “What is Fintech” is a question many are afraid to ask as it is a buzzword, and everyone is using it.
Finance is a big industry that includes Banks, Insurance providers, Merchants, and Consumers. Everyone uses money and years ago this money was in the form of coins or dollar bills. Now, however, we have liquid money. Liquid money is without a physical form, but still belongs to you. Do you see your balance on your phone? Do you transfer money through Venmo or Paypal? That’s all liquid money and part of Fintech!
Because the Financial Services sector is vast, Fintech includes ANYTHING that has to do with finances and uses technology to make it easier, simpler, or more efficient.
Paypal and Venmo are the simplest examples here. They allow you to send and receive money from your workers, family members, and friends. No more waiting for the other person to take out money and give you cash. No more finding coins and giving them back their change. Plain and simple money transfers.
Fintech also includes lending and borrowing services. Companies like Lendit make it easier for people to borrow money and start businesses or pay for various things. The long process of filling out forms, keeping collateral, and waiting months for your loan has reduced to a matter of days. Once click and you can have your loan and get to work!
Digital banking has picked up pace in the past years and it has shown its growth. People can now see their balance, make transactions, and ask for digital statements through their phones. They no longer have to wait in lines or even go to a physical bank and fill out paper forms to conduct these tasks.
Robinhood is a prime example on how Fintech helps bring trading to everyone. They don’t charge a penny for trades and make it possible for people to trade using their phones. Thus, anyone can trade stocks now using just their smartphone!
People used to be experts on the stock market and in various industries who told you how to invest and which places to invest in. These were financial advisors and one would pay them to get their services, but now there are companies like Betterment that offer robo-advisors. Using technology and data, robo-advisors are able to guide you towards better investment choices and they seem to be gaining traction!
These are just some areas where Fintech has been successful and famous. Anything that uses technology to make financial services easier is fintech, be it in the back office of a bank or the interface of mobile investing app!
Fintech’s future is bright and full of possibilities. The topic areas range from InsurTech & RegTech to Cryptocurrencies and Open banking. InsurTech is technology that is included to make insurance providing easier and RegTech refers to technology making it easier for bodies to govern financial regulation. Cryptocurrencies are alternate forms of currencies that one can use and is linked to Open Banking which allows for third parties to access consumer data to create an interlinked network between banks and financial services.
Such technologies are used to make the experience of the consumer more convenient and affordable and that is where the future of Fintech is headed. Many experts talk about these topics on their shows and Gaper invites many of these experts to speak on our podcast as well! If you are interested to know who these experts are and why you should follow them, we have a list right here.
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