What is Fintech? Examples of Types, Products & Regulations.

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What is Fintech? Examples of Types, Products & Regulations.

What is Fintech? Examples of Types, Products & Regulations.
Fintech is the term that describes the group of new financial technologies designed to enhance and automate the use and delivery of financial services. It is changing how we save, borrow, and invest money by making digital financial transactions easier and simpler, without the need for a traditional bank.
Money had long been making this world go round. In recent years, however, it appears fintech is taking over to call the shots. In case you've been living under a rock, it's understandable to ask: What is fintech?
Financial technology is actually all around us. When we buy something, many of us use fintech instead of cash. Many use it to do various financial transactions in ways that are far more convenient than before.
Fintech will continue to transform our society in the years to come. So let's familiarize ourselves with this highly-disruptive class of financial innovations.
What is Fintech Table of Contents.
Some bits of fintech history.
Financial technology applies to any innovation that involves financial transactions, be it personal use or for business. Initiated by the birth of the credit card (the 1950s) and the ATM (1960s), fintech had since been disrupting our world.
There used to be a time when fintech only pertains to the back office operations of banks or stock trading companies. The Internet boom and the rise of mobile computing had propelled fintech to become a continuing global revolution.
Today, fintech has indeed taken an important space in today's digital world. With an expanding family of robust technological tools for personal and commercial finance, it is poised to further grow in use and impact.
(Source: Abhishek Soni/Medium.com, 2019)
Finally, a cashless society?
The long string of fintech advancements had kicked off the powerful notion of a cashless society. Almost everyone had been talking about it for quite some time now. But signs indicate that we must still live with cash for a longer time than anticipated.
Fintech will play a crucial role in making a cashless world a reality. Given the rapid pace of how technology is changing the financial world, further fintech developments will likely bring about vast improvements to business and finance.
Before fintech reaches further milestones in the near future, it pays to know now the essentials about this awesome technology. Whether we like it or not, many of us had been using some forms of fintech without the slightest idea what it's all about. This is why we've prepared this definitive introduction for you.
Fintech basics.
What is fintech? Fintech is defined as innovations that involve the ever-expanding integrations between digital technology and finance. Such integrations commonly seek to enhance and automate the use and delivery of financial services to consumers and businesses.
The term is also used when talking about firms that create and provide such innovative financial products and services.
What is the purpose of fintech? Fintech uses technological tools to help consumers and companies to more efficiently manage their financial transactions. Initially confined to only desktops and laptops, fintech services are now increasingly done using smartphones.
These fintech-empowered tools are changing the way many consumers track, manage and facilitate their finances. Every year, an increasing number of people across the world are using fintech. In the U.S. 64% of millennials and 59% of Gen Xers have at least one full-service banking app on their phone.
Aside from consumers, venture capitalists are contributing significantly to its global growth. For 2018 alone, Fintech firms raised an unprecedented US$39.6 billion.
From the background to center stage.
From mobile payment apps to insurance and investment companies, fintech has disrupted traditional financial and banking industries. At the rate it's growing, it is becoming a threat to the very existence of conventional, brick-and-mortar financial institutions.
At first, fintech was confined to function as back-end systems of banks. But after a myriad of innovative apps and wide applications, they've now gone mainstream. Today, millions of consumers and businesses are using various forms of fintech in their daily financial transactions, usually via a smartphone.
Fintech empowers approximately 2 billion people across the world with no bank accounts. It provides them easily accessible options to make them more financially viable without the help of traditional banks.
Top Countries for Fintech Services Adoption 2019.
For Banking and Payments Only (accounts for 56% of worldwide total)
Source: Statista (June 2019)
Different types of fintech.
Fintech is defined as organizations that combine innovative business models and technology to enable, enhance and disrupt financial services. Here are today's main categories of fintechs, based on their current capabilities to make significant, real-life contributions.
Payment Gateways.
Electronic payment systems had been around even before e-commerce was born. These online payment gateways have revolutionized payment, making it convenient, easy, and highly accessible for all.
The most notable contribution of payment gateways is that they allow people to send money without the need for a bank. By removing the expensive bank fees, payment gateways have given consumers considerable benefits and savings.
Aside from these advantages, fintechs are also upgrading the security aspects of online payment gateways. For instance, fintechs are developing blockchain-based systems to make electronic money transfers more secure and cost-effective, compared to banks.
Mobile Payments.
With 5.11 billion unique mobile users worldwide, it's not surprising global mobile payment transactions will be worth over $1 trillion in 2019. By 2023, that figure is expected to exceed US$4.3 trillion.
Indeed, the global diffusion of mobile payments is nothing short of being phenomenal.
It's no wonder fintech firms are constantly improving their products and services to better serve consumers everywhere. Advancements in mobile wallet technology, digital authentication, and NFC are spearheading these developments.
If a cashless society is something that's still quite impossible to achieve, a physical credit card-less world is fast approaching to happen.
Have you checked out today's best mobile payment offerings? It's good to try out some as fintechs tend to roll out new features regularly.
Budgeting Apps.
People used to take the time-often in a quiet area in their homes-to calculate their expenses and make appropriate budgets. Monitoring finances commonly involve navigating through spreadsheets and rummaging through paper receipts and checks.
Today-thanks to budgeting apps-monitoring expenses and planning budgets have become easy and more efficient. In fact, one of the most used fintech offerings to date is a mobile budgeting app.
Either for personal and business purposes, budgeting apps allow anyone to easily ad effectively closely monitor their expenses, income, and other finances. These wonderful apps have truly transformed how consumers see and perform their financial activities.
Consumer Banking.
Another fintech category that's taking the world by storm is consumer banking.
At this day and age, about 1.7 billion adults remain without a bank account or access to a mobile money provider. This is mainly because traditional banks had been operating in ways that marginalize many impoverished people.

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Source: What is Fintech? Examples of Types, Products & Regulations.

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