Fintech has been disrupting the financial industry recently, using some of the newest technological developments. It has turned the industry upside down, helping companies provide far better financial services to both individuals and businesses.
CashLady dives into the intricacies of Fintech to show you what it means for you.
What is Fintech?
Short for “financial technology”, Fintech is one of the fastest growing areas in tech. Essentially it refers to computer programs and other technology used to support and enable financial services and banking.
This includes everything from new ways to shop for short-term loans to apps to help you save money. What’s more, many consumer Fintech services are accessed and used conveniently from smart devices in the form of applications.
Key Examples of Fintech
You may find some of the following examples of Fintech in the wild, surprisingly familiar.
This year (2019), the mobile payments market is on the verge of surpassing $1 trillion. For you, this means apps like Apple Pay, Venmo and AliPay are using Fintech to help you make mobile payments quickly and efficiently.
Saving money on a low income can be aided with the use of handy mobile budgeting apps. The rise of services like Mint, Yolt and Cleo all use Fintech to help individuals track their spending, monitor their income and squirrel money away into savings.
This is extremely beneficial for consumers, who used to have to do all this through spreadsheets and other complicated formats. These apps have made it quicker and more accessible to the average person.
Fintech is not only limited to traditional banking. It is likely that you have heard of sites like GoFundMe, Patreon and Kickstarter. These are crowdfunding platforms that let users receive and send money to each other. It has also made it possible for both businesses and individuals to pool their financial resources from a range of sources, into the same place.
The number of crowdfunding platforms has increased over the years catering to both businesses and consumers. For businesses instead of having to go to a regular bank for a loan, they can now support their company and projects by going directly to investors.
For consumers in need of quick cash, they can go to friends and family for help.
Even the insurance industry cannot escape disruption from Fintech. It has its own abbreviation and hashtag called Insurtech too.
From home and car insurance to data protection, it is designed to extract savings and efficiency from the insurance industry model.
Examples of up and coming insurtech companies include:
- Flock – who provide insurance for commercial drone pilots
- Wrisk – A one-stop insurance app covering almost everything
- Laka – who has built a community-based model for bicycle insurance
Fintech also applies to crypto-currencies like bitcoin, as well as robo-advising and stock trading apps, which goes to show that the applications are virtually limitless.
What Fintech may look like in the future
In the future, it is likely that new technology like artificial intelligence and machine learning, could take much of the guess-work out of our financial decisions.
An existing example of this are chatbots who already help people with basic tasks. Looking forward, learning apps could learn consumers habits, engaging them in games designed to make their spending decisions better.
Fraud is another area that will see continual benefits from Fintech by aiding users payment history to highlight any unusual activity.
Final thoughts on Fintech
New technology, aimed at consumers wanting a better and/or easier way to manage their finances, is being developed all of the time. While there are still many questions surrounding privacy and data security, on a whole, Fintech should have a positive impact on consumers.