FinTech is one of the fastest-growing areas in the financial industry. Its key task is to make finance more accessible to private and corporate clients. FinTech involves the development of innovative solutions in the financial sector, which makes it more user-friendly and more accessible to all parties. We will tell you what financial technology is and how it works.
What is FinTech? This term stands for financial technologies and means approaches that make financial services more convenient for users. Fintechnology includes:
FinTech is technologies and solutions that allow innovative companies to compete with traditional banks and financial institutions. The development of such technologies is carried out by both fintech startups and financial companies that want to gain an advantage over their competitors in the market and change customer habits.
Many people used to think that FinTech is an internal tool exclusively in private companies. However, now these technologies are increasingly focused on private users. With their help, consumers of financial services can conduct various transactions, from money transfers to direct payments for purchases on the Internet.
The financial technology industry is divided into several categories covering various areas of the financial industry. The main ones are the following:
In addition, FinTech is applicable in other niches. For example, special solutions have been developed for B2B settlements, analyzing huge amounts of data, insurance, etc.
Fintech is no longer a mythical but an actively working industry with which billions of people interact daily. For example, digital banks have become widespread. Revolut is one of the examples of such fintech companies. This financial application provides all the necessary banking services – money transfers, payments, currency exchange, etc. At the same time, Revolut does not have physical branches, and there is no need for them since all services are available directly in the application. Investments are also available with the help of Revolut. For example, you can invest in stocks of famous companies.
FinTech is also being integrated into communication services. For example, the largest Chinese messenger WeChat has implemented a payment service developed by Tencent. Thanks to this, it became possible to link a bank card in WeChat and pay for physical or online goods and services directly through the messenger. This service is used by about 20% of the messenger’s audience, which is approximately 890 million people a month.
There are also promising developments. For example, Sthaler has developed a technology for paying for goods and services called FingoPay. Its peculiarity lies in the fact that the payment is made after the biometric scanning of the finger. At the setup stage, the application automatically creates a “vein map.” When used directly, it quickly recognizes the finger of the person who makes the payment. This provides a very high degree of protection against fraudulent transactions.
FinTech is a dynamically developing industry. The developments carried out within its framework open up new payments and money management opportunities for both individuals and small businesses, as well as huge corporations. FinTech services are designed to compete with traditional financial institutions, and they cope with this task so successfully that classic banks are forced to transform under the influence of new trends. FinTech is developing and will continue to develop in the future, making payment technologies more and more reliable, profitable, and fast.