Fintech is someone that everybody is talking about these days. In this post, we are going to talk about what fintech is, its different kinds, and why everyone is so obsessed about it right now.
These technologies help companies manage the financial aspects of a business. Fintech is also the name given to an industry that hires expert fintech developers, like Serokell, to be able to compete with traditional institutions for the hearts and funds of customers.
A brief history of financial services
The idea was first embodied in the form of a credit card system back in 1950. It was first used to pay for entertainment while traveling. In the 50s and 60s, self-service points at gas stations, supermarkets, and public transport created an environment for the emergence of ATMs. In the 70s, the first electronic trading appeared. Big data took its first steps in the 1980s, and Peter Knight, in his article for the Sunday Times, first mentions the word fintech.
The global crisis of 2008 was the catalyst for changes in finance. People stopped trusting old-format banks. At their request, startups and new business models began to appear. Large corporations turned their attention to fintech and started investing in this area.
Different types of fintech
During the years of its existence, more than a dozen categories have emerged in fintech:
Personal finance
These are mobile and desktop applications that help individual users manage their finances, analyze the expenditures and profit and receive forecasts of future expenses in the form of detailed reports.
Mobile Internet and smartphones allow providing access to financial services to everyone even where there are no banks around. For example, lending money has become much easier with mobile access to banks. You can even send money, or receive it, with a few taps and swipes on your display. Having this type of apps saves a lot of time, especially right now, when we all need to ensure we are maintaining the proper social distance.
Money transfers
International money transfers with the help of traditional banks can be too slow and costly. Startups in this area allow users to transfer money without the participation of banks. They use mobile platforms and simple authentication in their work. For example, TransferWise is a platform for cheap international currency transfers that works almost everywhere and charges very small commissions.
Wealthtech
Wealthtech includes robotic advisors, digital brokers, micro-investment platforms, and personal finance management programs. It works on automation and provides market accessibility for retail investors. They are especially appreciated by investors due to predictive analysis and robotization.
Security
Companies in this area provide simpler and more reliable data processing for banks: from customer authentication to protection measures against fraudulent schemes.
B2B
This is designed to solve the problems of mutual settlements and data exchange in business. The focus is on smart contracts based on blockchain technologies.
Big Data Analysis
There are now hundreds of startups working on Big Data for the financial sector. Advertising and PR have been using personal data analytics in their activities for a long time, but the financial sector needs a more systematic approach.
Donation and crowdfunding websites
Financial technology is widely used in crowdfunding, and the best examples of that are GoFundMe, a platform people are actively using to collect money for different causes and purposes. People can donate, send, and receive money from more than one source, that is stored in one fund. They only need to create a fundraising link and share it with their friends and families. People can easily send some money by just clicking one button, and they can be sure the transaction is safe and secure.
Cryptocurrency transactions
People often have struggled to make crypto transactions all over the world, but fintech is the answer. Many exchanging platforms have this technology implemented, so they can offer a complete service to their clients, and be sure they will receive the coins or money. This is still a controversial usage of financial technologies, but if we expect the cryptocurrencies to be widely adopted and used, then probably people will have to find a way how they will transfer the money to someone who is on the other side of the world. As you suppose, the answer is exactly the fintech.
Outsource budgeting
Can you imagine a world where people can’t really send and receive their payments at the exact moment they want? Sounds frightening, but our parents and grandparents didn’t have that chance. Your employees, collaborators, and people who give you outsource services can be paid at the very same moment you sign the contract because this technology is providing a lot of tools that help complete the transactions or track their status. The best thing is that you have all of this available on your phone or tablet.
As technology is developing more and more, it’s expected that it will find its purpose in almost every field in our life. We won’t lie if we say that people today are using it for almost everything. We own smartphones that have better features than computers ten years ago. Today, we can do almost everything using them – order food, book an apartment for your vacation, buy clothes and shoes, pay your bills, order a taxi, and so on. By implementing fintech, you are able to pay for these things immediately and use many other financial services your bank offers you.
This is a real revolution in the global economy and will lead to a lot of improvements, and user-friendly platforms and apps, that will use fintech as a base. No matter if it comes to money advising, crowdfunding, rentals, real estate, mobile banking, and much other finance service we use today, this technology appears in every field of our life.
And do you know what’s best? You can successfully use it, no matter if you are a business owner or a service-giver. Finance technology is helping everyone to understand how money and transactions work, without having to be worried about the safety of payment platforms, and e-banks. It’s on you to embrace it, and save a lot of time and nerves thanks to that.
