Fintech, a shortened term for financial technology, has witnessed many successful developments in the past few years. Fintech is an encompassing term that covers any technology that can be used to redesign and streamline the traditional methods of financial services. It can, however, be broken down further into a variety of smaller categorizations. Just to name a few, these may include weathtech, investtech, and insuretech. Fintech includes softwares and applications that can be used on computers or cell phones. Some may also include hardware through smart piggy banks and virtual reality trading platforms.
The most well-known forms of fintech help customers with simple, everyday actions. These include moving money between accounts, depositing checks, and paying for bills through a mobile app or computer. These examples provide direct, streamlined services for their customers. Fintech can include technology for back-end operations as well and businesses may use fintech for accounting and applying for government assistance programs during the pandemic.
With the pandemic, there has been an impressive increase in the adoption of fintech. Many businesses are utilizing fintech alternatives that would provide safer options for customers such as contactless payments.
While fintech is a relatively new term, these forms of technology have been around for well over a century. Though they are so commonplace to us now, ATMs used to be the face of innovation. Signature-verifying technologies were originally established in the 1860s and were commonly used by banks.
Though fintech had previously been associated with small startups, it has developed to be an integral part of well-established financial institutions. The world’s largest companies approve and support the fintech wave. For example, JP Morgan has invested $25 million (about €21 million) in fintech startups in 2019. Capital One has also adopted new, tech-oriented additions to attract young, tech savvy customers like “banking cafés.” Citi started a Citi Developer Hub in 2016. This entailed getting third party programmers to analyze and discuss feedback on application programming interfaces (APIs).
Unlike many other businesses, fintech companies and companies that incorporated fintech in their operations, already had services that customers could access despite lockdown regulations in the pandemic. Capital One is an example of this. Though the physical cafés are closed, their banks can continue to function because they already incorporated digital services into their business.
Companies with fintech services were able to fare better throughout the pandemic because their customers still had near-complete access to their services. Fintech has come a long way over the past century and the industry will only continue on its path of rapid growth and development in the years to come.
Walden, Stephanie. “What is Fintech and How Does it Affect How I Bank?” Forbes, 3 August 2020, https://www.forbes.com/advisor/banking/what-is-fintech/.