Fintech is a term used to describe financial technology, an industry encompassing any kind of technology in financial services – from businesses to consumers. Fintech describes any company that provides financial services through software or other technology and includes anything from mobile payment apps to cryptocurrency.
Broadly, fintech describes any company using the internet, mobile devices, software technology or cloud services to perform or connect with financial services. Many fintech products are designed to connect consumers’ finances with technology for ease of use, although the term is also applied to business-to-business (B2B) technologies as well.
Fintech has made inroads with dozens of applications and has changed the way consumers access their finances. From mobile payment apps like Square (SQ) – Get Square, Inc. Class A Report to insurance and investment companies, fintech has disrupted traditional financial and banking industries – and potentially poses a threat to traditional, brick-and-mortar banks or financial institutions.
Initially, fintech referred to technology that was applied to the back-end systems of banks or other financial institutions – but has since grown to encompass a plethora of other applications that are more consumer-focused. In 2020, it is possible to manage funds, trade stocks, pay for food or manage insurance through this technology (and often on your smartphone).
The tools provided by fintech are changing the way many consumers track, manage and facilitate their finances. In fact, according to data from 2016, people use between one and three apps to manage their finances. And, it seems as though investors are bullish on the industry. According to CNBC, fintech investment soared up 18% in 2017 alone.
For the estimated near 2 billion people worldwide without bank accounts, fintech provides a nimble option to participate in financial services without the need for the brick-and-mortar. And, to a large extent, that is precisely what fintech has been developed to do – give consumers direct access to their financial lives through easy-to-use technology.