The Sunday Mail
Fintech” refers to any technology that automates and facilitates access to financial services. Companies in fintech provide people with bank accounts, loans, insurance, investments, and more, entirely online and often within minutes. In this story, you’ll learn about this expanding technology and how you can use it to your benefit.
Fintech is short for financial technology. It’s an umbrella term describing several different companies, products, and services. If you’ve ever deposited a cheque using a mobile device or transferred money using an app, you’ve used fintech.
But its uses can be more complex and substantive than that. These days, you can obtain a personal loan or settle an insurance claim completely on your mobile device. In fact, fintech companies are trying to disrupt the entire financial services industry.
And competitors are hearing the noise. According to a study by accounting firm PWC, 88 percent of legacy financial institutions believe they are losing revenue to fintech companies.
Consumers are also riding the wave. Digital payments made using fintech worldwide grew by nearly 5 percent in 2019, bringing total global payments revenue to just under $2 trillion, according to a McKinsey study.
How does fintech work?
At its core, fintech is technology and innovation that simplify financial transactions.
To better understand how fintech works, here are some examples of fintech sectors and the companies that operate there.
Digital Payments
One of the most common examples of fintech is apps that allow you to seamlessly transfer money to another person or business.
You’ve probably already used PayPal to do this.
But even traditional financial institutions are following suit with their own versions. Now, you can use mobile banking apps to transfer money via the Zipit addition.
Those payments are typically processed within minutes. And traditional banks may keep flirting with fintech.
In fact, a 2017 survey by PWC found that 82 percent of incumbent financial institutions expected to increase their partnerships with fintech companies in the next three to five years. Investing Apps in the financial markets is no longer just for the wealthy.
With investment apps like C-Trade, you can trade stocks directly from your phone. CryptocurrencyDigital money, or cryptocurrency, is becoming increasingly popular. It’s an unregulated and decentralized form of currency that can be used to buy goods or invested in through brokerages.
And while you may have heard of Bitcoin, there are thousands of cryptocurrencies out there.
Insurance
You no longer need to sit with an insurance agent to discuss policies, get a quote, or even file a claim. You can pull out your smartphone and do all that right now.
Digital insurance companies are using technology to make shopping for coverage easier. Whether it’s car, health, or life insurance, there’s a fintech for that.
Key takeaways
Fintech is technology that facilitates access to financial services, often at a fraction of the cost of traditional institutions.
Fintech companies offer bank accounts, credit cards, loans, insurance, and more—entirely online. Legacy financial institutions are noticing the fintech disruption, so many have partnered with emerging fintech companies to deliver a better digital experience for their customers.
Financial technology may better suit people who are ready to fully embrace digital developments and manage their finances entirely online, without physical bank branch support. -The Balance.
