Fintech is a term that can be used to describe an emerging financial services sector in the 21st century. It also describes companies that use new technology and innovation with available resources in order to compete in the marketplace of traditional financial institutions and intermediaries in the delivery of financial services.
It is essentially innovation in the financial services sector.
It also refers to new applications, processes, products or business models in the financial services industry.
How is Fintech changing the world?
New technologies are seen as a threat to traditional companies in the banking industry. Despite this, Fintech is easing payment processes, reducing fraud and saving users money in addition to promoting financial planning.
The term is now used to describe a broad variety of technological interventions into personal and commercial finance.
In recent years it has come in the form of a wave of digital disruptions.
“The world is far more connected today than it was 15 or 20 years ago. The tools that are available- cheap storage, cheap computing and wonderful analytics- have changed, the regulatory environment has changed and people are way more comfortable managing their money and business online,” says Pat Grady, a partner at Sequoia Capital.
Fintech is being revolutionised by entrepreneurs for entrepreneurs.
Alternative lending and forms of investing are being introduced. In some markets, the use of money is being replaced by digital currency options. Cryptocurrency, like Bitcoin is changing the way that people are transacting and may be a major digital disruptor on a global scale in coming years.
Fintech represents changes that are designed to make the financial industry more efficient, through the use of technological innovations. The term encompasses a wide range of resources used to improve the delivery of financial services.