Fintech

Financial Technology (fintech) is defined as any technology that is geared towards automating and enhancing the delivery and application of financial services.

The origin of the term fintech stems from the 1990s where it was originally used as a back-end system technology for renowned financial institutions.

Over the past thirty years, the fintech space has grown outside the business sector with an increased focus upon consumer services and investing.

How do Fintechs Help Change the Status Quo?

The main purpose of fintechs is to disrupt or supply technological service that not only simplifies but also aids consumers, business operators, and networks.

This is done by optimizing business processes and financial operations through the implementation of specialized software, algorithms, and automated computing processes.

Transitioning from the roots of the financial sector, fintech providers can be found through a multitude of industries such as retail banking, education, cryptocurrencies, insurance, nonprofit, and more.

While fintechs cover a vast array of business sectors, it can be broken down into four classifications which are as followed:

Business-to-business for banks, Business-to-business for banking business clients, business-to-consumers for small businesses, and consumers.

More recently, fintechs presence has become increasingly apparent within the trading sector, primarily for cryptocurrencies and blockchain technology.

The creation and use of Bitcoin can also be contributed to innovations brought upon by fintechs while smart contracts through blockchain technology have simplified and automated contracts between buyers and sellers.

Fintechs have also streamlined and disrupted trading for stocks, foreign exchange, and other assets.

For example, the disruption of the US retail stock trading industry by Robinhood and other players has resulted in the widespread adoption of a commission-free trading model.