Financial technology is emerging rapidly in the twenty-first century. It is used to describe new technology introduced in the finance world. The aim is to improve and automate the operations of financial services. Fintech is used to manage financial operations and business processes effectively. Special algorithms and software are used on computers and smartphones. The word ‘Fintech’ means financial technology.
 According to EY’s 2019 Global FinTech Adoption Index, two-thirds of consumers utilise at least two or more fintech services, and those consumers are increasingly aware of fintech as a part of their daily lives.
Recently, the development of cryptocurrency like Bitcoin is a prime example of a fintech company. However, still most capital lies in the traditional banking industry.  Â
Key takeaways
- Fintech is understood as the incorporation of technology into the finance industry. It is done to improve their use and deliver the best to the consumer.
- Fintech works by unbundling offerings by firms and creating new markets for them.
- With the use of technology, the operational cost has been reduced significantly.
- Even though fintech funding is on the surge, however, regulatory problems persist.
- Fintech applications, such as robo-advisors, payment apps, and investment apps, are used globally.
Fintech applications
Fintech startups are created to challenge traditional financial services. Their goal is to take over the existing industry by being more flexible. Fintech startups focus on serving the underserved segment of the population. The financial service must be optimal, which is faster and simpler.
For instance, affirm is a financial startup company. Affirm seeks to reduce credit card companies out of the online shopping process. They provide consumers with a secure, immediate, short-term loan for purchases. Affirm allows individuals with poor or no credit history to secure credit by building a credit history.
Is fintech limited to banking?
No, the fintech does not just apply to banking. Banks and startups create fintech applications around basic banking. For example, checking & savings accounts, bank transfers, and credit/debit cards. The other fintech areas include personal finance, investing, and payments.
Uses of finance technologyÂ
| Cryptocurrency | These usually rely on blockchain technology.
Blockchain technology uses code to automatically execute contracts between buyers & sellers. |
| Open Banking | People must access bank data to build applications. These applications create a network of financial institutions & third-party providers.
For example, Mint is an all-in-one management tool. |
| Insurance | Insurtech uses technology to simplify problems. It aims to streamline the insurance industry. |
| Regtech | Regtech helps financial service firms meet necessary industry rules.
An example is rules covering anti-money laundering & KYC protocols that fight fraud. |
| Robo-advisors | It uses algorithms to automate investment advice to reduce costs. Robo-advisors work on increasing accessibility. |
| Cybersecurity | The cybersecurity and fintech industries work together to safeguard customer’s data. |
| Artificial Intelligence(AI) | The AI has risen significantly since 2022. Its applications in fintech have improved customer’s experiences holistically. |
Users of the Fintech
There are majorly four categories of fintech users. The list of these users is given as below:
- business-to-business (B2B) for banks
- Clients of B2B banks
- business-to-consumer (B2C) for small businesses
- Consumers
Various trends toward mobile banking and increased information and data create opportunities for users.
The fintech industry is widely popular amongst the younger generation. Consumer-centred fintech is targeted toward Gen Z & millennials. It is done because they are the rising earning potential of this generation.
The conclusion
 To sum it up, financial technology has seen a rapid surge in the modern century. It helps to automate the operations efficiently. With the use of fintech services, there has been an increase in speed and accessibility. Financial technology aims to streamline payment, lending, and investment.Â
Fintech platforms ensure to provide real-time data analytics. Financial technology services improve decision-making for businesses & individuals. Various innovations, such as blockchain and AI-driven, have changed the financial landscape. These innovations have enhanced financial inclusion while incorporating transparency. Fintech continues to strive for greater efficiency. It fosters employment, leading to economic growth. The aim is to transform traditional services into a more responsive one.