You’ve probably heard the term FinTech a lot lately. But what exactly does it mean and why does it matter? Below, we tackle the question What is FinTech? and take a look at the financial technology trend that’s transforming finance.
What is FinTech?
FinTech refers to the application of modern technology to improve and automate financial services delivery. It combines financial expertise with innovative technologies like blockchain, artificial intelligence, big data analytics and machine learning.
The main goals are to increase accessibility, efficiency, speed and security of financial offerings. FinTech services span everything from digital payments to lending platforms, investment apps and blockchain-based cryptocurrencies.
Prominent FinTech companies include payment processing services like PayPal, Venmo and Stripe. LendingClub and SoFi exemplify FinTech lending platforms. And you likely know investing apps like Robinhood that offer easy access to trading and markets.
The FinTech revolution aims to expand financial inclusion, especially for the underbanked. New tech-based models lower costs and open up finance. This enables major progress in areas like access to credit and savings accounts in developing countries.
Of course, FinTech also faces challenges related to cybersecurity, regulation, anduser adoption. But investment continues to pour into FinTech startups looking to disrupt finance. Global funding hit over $200 billion in 2021 alone.
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