What is fintech

Published by Josip Povreslo on 24. July, 2024



Today, this is probably a light post for experienced Fintech professionals, but it might open some discussion and help those who are not that deep into the technology.

Fintech, short for financial technology, refers to the integration of technology into offerings by financial services companies to improve their use and delivery to consumers. It encompasses a wide range of applications, innovations, and processes that aim to enhance financial services and make them more accessible, efficient, and user-friendly. By now, it's very clear what is Fintech, right?


Some of the key aspects of fintech would be (I probably forgot to mention a few):

  • Digital payments and transfers

Mobile Payments

Cryptocurrencies

  • Payment Technology

Internet payment gateways

Payment service providers

Payment processing solutions

  • Banking Innovations

Neobanks

Mobile Banking

  • Investment and Wealth Management

Robo-Advisors

Crowdfunding Platforms

  • Landing and Borrowing

Peer-to-Peer Lending

Online Lending

  • Insurance Technology

Digital Insurance Platforms

Usage-Based Insurance

  • Blockchain and Decentralized Finance

Smart contracts

DeFi Platforms



Things are getting complicated here, as for each aspect, there is a plethora of service providers, technology providers, and development agencies, all of whom proudly represent themselves as "Fintech." In all that chaos, labeling a company as Fintech becomes similar to labeling a company as an IT company.


While it is normal for many to try to participate in the lucrative markets that Fintech companies create and open, some companies add to the confusion. We have participated in many fintech conferences over the last four years, and many development agencies also label themselves as fintech, which creates a bit of ambiguity. While they certainly participate in the fintech ecosystem, they are not necessarily fintech companies themselves.


Fintech is a complex topic that could easily be a college major.


Some people say fintech is a company that provide financial services to it's customers using technology, where providing services directly to the customer is crucial to label the business as fintech.


Others would say how providing the technology to the company that selling directly to the customer is enough to be considered a Fintech.


After an interesting discussion about this topic on Linkedin we got some more some more information on what describes a company as a fintech.


  1. Innovation and Disruption: Earlier technology primarily supported and automated existing banking processes. Modern fintech, however, often disrupts traditional banking models by introducing entirely new ways of delivering financial services, such as peer-to-peer lending, robo-advisors, and cryptocurrencies.
  2. Consumer-Centric Services: Fintech places a strong emphasis on creating user-friendly, accessible financial services that can be used by a broader audience, including the unbanked and underbanked populations. This contrasts with older technologies that were more institution-centric.
  3. Integration with Everyday Life: Fintech seamlessly integrates financial services into everyday activities through mobile apps, wearable tech, and other digital platforms, enabling real-time financial transactions and management.
  4. Regulatory Environment: The regulatory landscape has evolved to accommodate and support the rapid growth and innovation within fintech. This includes new regulations specifically addressing digital payments, online banking, and blockchain technology.
  5. Technological Advancements: The advent of advanced technologies such as artificial intelligence, machine learning, big data analytics, and blockchain has created opportunities for entirely new financial products and services that were not possible with earlier technologies.
  6. Startup Culture: The rise of startup culture and venture capital investment has accelerated innovation in fintech, allowing small, agile companies to challenge traditional financial institutions with innovative solutions.


Modern fintech is fundamentally customer-centric, focusing on improving the user experience, accessibility, and personalization of financial services. Here are some key aspects highlighting this customer-centric approach:


  1. User Experience (UX): Fintech companies prioritize intuitive and seamless user interfaces, making financial services easier to use and understand for the average consumer.
  2. Accessibility: Fintech solutions aim to provide financial services to underserved populations, including the unbanked and underbanked, by leveraging mobile technology and internet access.
  3. Personalization: Using data analytics and artificial intelligence, fintech companies offer personalized financial products and services tailored to individual customer needs and preferences.
  4. Transparency and Trust: Fintech emphasizes transparency in fees, transactions, and financial advice, helping to build trust with customers.
  5. Convenience: Fintech solutions often integrate financial services into consumers' daily lives, offering on-the-go access through mobile apps and other digital platforms.
  6. Speed and Efficiency: Fintech innovations streamline processes such as loan approvals, payments, and investment management, significantly reducing the time and effort required from customers.


By placing the customer at the center of their offerings, fintech companies aim to deliver more value, enhance satisfaction, and foster loyalty.


This customer-centric approach differentiates fintech from traditional financial services, which have historically been more institution-focused.



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