Everything you need to know about fintech

New technologies and AI facilitates value creation nowadays. With the advent of the Internet, we are witnessing many innovations. Whether in commercial or service businesses, operations can now be carried out on the internet. From buying coffee at your local cafe to managing your finances, fintech is all around us. In the financial sector for example, today we are talking about Fintech which means fintech.

Fintech has been used for many of the most recent technological developments in payment applications or cryptocurrency.

Fintech is a portmanteau of the terms “ finance” and “technology ". It refers to any business that uses technology to improve or automate financial services and processes. Eventually,

• What is Fintech?
• How does it work?
• How to use it ?

In this article, we present everything you need to know about financial technologies. But to get started, you'll need to know how to use these technologies in companies in order to take advantage of it.

Let's go...

???? What is Fintech?

Many start-ups have launched themselves in this sector in recent years. exploding! Their innovations aim to facilitate banking, payments, loans, personal finance management, fundraising, insurance, etc.

With mobile apps,artificial intelligence, blockchain, big data or even the cloud ☁️, they offer services that are faster, more practical, secure and less expensive than the traditional banking sector.

FinTechs allow for example instant transfers, contactless mobile payment, 100% online accounts, robo-advisors for portfolio management, crowdfunding, etc.

Large groups are also adopting these new technologies to remain competitive 💪. The FinTech sector is therefore experiencing growth and massive adoption on a global scale!

For consumers, FinTech makes daily life easier and gives more control over finances. For professionals, they optimize processes and reduce costs 💸. Their impact is considerable and will continue to amplify !

???? How does fintech work?

Fintech is not a new industry. It's just an industry that has evolved very quickly. Technology has, to some extent, always been a part of the financial world.

Whether it was the introduction of credit cards in the 1950s or ATMs, electronic trading floors, personal finance apps and high-frequency trading in the decades that followed.

The innards of financial technology vary from project to project or application to application. Some of the latest advances use machine learning algorithms, blockchain and data science to do it all.

In fact, there is an entire subset of regulatory technologies called “regtech” designed to navigate the complex world of compliance and industry regulatory issues.

Blockchain is a ledger that facilitates the process of recording transactions and tracking assets in a corporate network. An asset can be tangible or intangible. Virtually anything of value can be tracked and traded on a blockchain network. What reduces risks and costs for everyone involved.

Fintech is present in different sectors and industries. Here are some examples of fintech uses.

???? The Uses of Fintech Financial Technologies

The financial services industry is generally not synonymous with agility. But today, adaptability and rapid iteration are precisely what consumers and business leaders expect – and, increasingly, need.

The examples of fintech use are visible everywhere, we present to you the most used.

✔️ Cryptocurrencies and digital money

Cryptocurrency and blockchain are typical examples of Fintech. Cryptocurrency exchanges like Coinbase and Gemini connect users to buy or sell cryptocurrencies like bitcoin or litecoin.

But in addition to crypto, blockchain services like BlockVerify help reduce fraud by maintaining provenance data on the blockchain. These technologies are called Tokenization.

And while these technologies may be somewhat controversial uses of fintech, they have certainly taken parts of the investment world by storm in recent years.

✔️ Insurtech

Insurance technology is abbreviated Insurtech. It is a broad and evolving category of technology used in the insurance industry. Any technology used by an insurance company to increase the efficiency of its operations could be considered Insurtech.

The digitalization of the insurance world seems like a must. Today we are witnessing the emergence of start-ups that combine insurance and technology.

✔️ Open Banking

Open Banking is a blockchain-based concept. It postulates that third parties should have access to banking data to create banking applications.

Open Banking is a banking practice that provides third-party financial service providers with a open access to banking data, transactions and other consumer financial data from banks and non-bank financial institutions through the use of application programming interfaces.

It will enable the networking of accounts and data between institutions for use by consumers, financial institutions and third-party service providers. Open Banking is becoming a major source of innovation that is reshaping the banking industry.

✔️ Mobile Payments

It seems everyone with a smartphone uses some form of mobile payment. In fact, according to data from Statista , the global mobile payment market is on track to surpass $2019 trillion in XNUMX.

Thanks to increasingly sophisticated technology, services have emerged that allow consumers to make money exchanges and payments over the internet. This can be done via computer or mobile device through payment apps like.

✔️ Budgeting apps

One of the most common uses of fintech is financial management apps for consumers, whose popularity has grown exponentially over the years.

Previously, consumers had to create their own budgets, collect checks, or navigate Excel spreadsheets to track their finances. But today, that is no longer the case. Now, consumers can easily track their income, expenses using applications and software.

Budgeting apps like Intuit (INTU) help consumers track their income, monthly payments, expenses, and more, all on their mobile device.

✔️ Crowdfunding Platforms

The platforms of crowdfunding allow project leaders to benefit from the support of business angels. Instead of approaching a traditional bank for a loan, it is now possible to approach investors directly.

And while their applications range from funding family and friends to funding fans and patrons, the number of crowdfunding platforms has multiplied over the years.

???? Fintech and traditional banking

Fintech and banks differ in many aspects, but the most significant difference lies in their purpose. Banks cater to a broader audience, while Fintech services seek to solve a specific problem in the market.

Therefore, these companies focus more on mobile functionality, big data, agility and accessibility. In other words, Fintech is synonymous with transactions more fast, 24/7 access and remote account opening, which can be very beneficial for many.

On the other hand, banks are falling behind in this department as they only incorporate UX practices that will ensure all their customers seamless interaction. Just as the term suggests, Fintech incorporates such technologies that provide fast and safe services instead traditional banks.

However, banks can become Fintechs. Even though Fintech is associated with something new and modern, the use of technology to help financial services is not new.

Credit cards were introduced in the 50s, online banking in the 90s and contactless payment technology in the first decade of the XNUMXst century.

The need for technological advancements in banking has made it popular for every bank to look to more technologically advanced options.

???? The Benefits of Fintech Financial Technologies

One of the advantages of FinTech is the provision of services that have overcome some of the restrictions of payment systems.

An example of this restriction is the geographical barrier in which people still have to go to banks to make payment transactions. Thus, fintech has the potential to improve financial inclusion.

The advancement of FinTech somehow prevailed over this restriction when people started using FinTech services such as digital and mobile wallets, mobile POS and peer-to-peer transfers.

The other advantage of Fintechs is the ease from mobile phone apps that run some digitized versions credit or debit cards. In addition, it is convenient to use, the centralization of payment options reduces purchase processing time.

Fintech is cheaper, it only comes with lower operating costs and lower fees. Otherwise, transactions are very fast and secure. You are no longer subjected to a plethora of physical controls.

???? The limits of fintech

Although promising, financial technologies (FinTech) also have certain drawbacks and limitations:

La data security constitutes a major challenge. The risk of hacking and leakage of sensitive data is increased with the dematerialization of financial services. Faults in the systems could lead to serious consequences.

Their regulation can be complex for the authorities. This sector is changing rapidly, which makes it difficult to adapt laws and monitor players. Some innovative services operate in gray areas.

FinTechs can lead to loss of many jobs in traditional banking, replaced by algorithms and AI. This involves professional retraining.

Digital-only interfaces lead to a dehumanization of the customer relationship. Personalized advice remains important in complex financial services. Many FinTechs fail to reach critical mass and go bankrupt after a few years. Consumers must ensure their sustainability.

Free or very low-cost services may hide lucrative use of customers' personal data. Transparency is essential.

Despite these challenges, the contribution of FinTech seems largely positive for modernizing the financial and banking sector. But a vigilance imposes itself on certain potential risks.

???? The Top 5 Fintech companies in the world

A Fintech company is any business entity that uses modern technology to provide financial services to its users.

Over the past decade, financial technology has become a very important component of the technology industry. Below are the 5 most valuable fintech companies from around the world. They are listed in ascending order.

✔️ Coinbase

Coinbase is a cryptocurrency exchange founded in 2012, offering users the ability to buy, sell and store digital assets such as Bitcoin, Ethereum and other popular cryptocurrencies.

The company has become one of the largest and most reliable platforms cryptocurrency exchange in the world, also offering digital wallet services and a range of other cryptocurrency-related products. As a publicly traded company, Coinbase is closely followed by investors and market observers.

Coinbase offers a range of products and services including an exchange to buy, sell and trade cryptocurrencies, a digital wallet to securely store digital assets, Coinbase Pro which is an advanced trading platform, Coinbase Earn which is an educational program for users to learn about cryptocurrencies and earn digital assets in return, as well as solutions for merchants and businesses who want to accept cryptocurrency payments.

Coinbase's financial performance as a publicly traded company is public and can be viewed through financial sources and company reports.

✔️ Paytm

Paytm is the largest financial technology company based in India. It was founded in 2010 initially as an online mobile recharge platform.

By 2015, the startup had expanded into e-commerce and online payment services and acquired 104 million registered users. Its current user base is close to 350 million (2019).

The company raised $1 billion in new capital at a valuation of $16 billion from its existing investors – Alibaba’s Ant Group and SoftBank Vision Fund, among other private equity firms in 2019.

Previously, Paytm's valuation reached $11 billion in 2018 after a $357 million investment by Berkshire Hathaway.

✔️ Adyen

Adyen is Europe's most popular fintech company. It allows businesses and merchants to receive payments from anywhere in the world.

This via card networks (such as VISA and Mastercard) and local payment methods. Additionally, it uses machine learning to provide transaction insights for revenue optimization.

The company has been profitable since 2011. In 2016, its gross turnover increased by 99% to reach $727 million. Adyen is backed by major venture capital and private equity firms, including Temasek Holdings, General Atlantic and Index Ventures. It went public in June 2018.

✔️ Stripes

Stripe is an online payment platform founded in 2010, providing businesses with the ability to process credit card payments and other online payment methods. The company has become a major player in the online payments space, offering solutions for payment processing, billing, subscription management and other related services.

As a private company, details about Stripe's financial performance are not as widely available as for a publicly traded company. Stripe is known for its user-friendly interface, security, and ability to easily integrate with websites and mobile apps.

Stripe's products and services include an online payments platform for businesses to process credit card and other payment methods, billing tools for managing subscriptions and recurring payments, and commerce solutions. online.

✔️ Ant Financial

Ant Financial based in China, is the world's largest financial technology company. It owns several financial services heavyweights, including Alipay, the largest online payments platform, and Yu’e Bao, the world’s third-largest money market fund. It also runs a private credit scoring system called Sesame Credit.

The company was founded after Alipay was rebranded as Ant Financial Services in 2014. The following year, the company secured considerable investment from 6,5 billion from China Investment Corp and other local institutional investors.

🌿 Summary

In conclusion, financial technologies such as Coinbase and Stripe have revolutionized the way financial transactions are carried out. These platforms offer innovative solutions for online payments, cryptocurrency trading and digital asset management.

While Coinbase stands out for its leading role in cryptocurrency exchange and its diverse products, Stripe is known for its user-friendly online payment platform and advanced billing tools. These companies continue to shape the future of financial transactions and play a critical role in the evolving global financial landscape.

With their commitment to innovation and security, Coinbase and Stripe remain at the forefront of financial technology, offering sophisticated solutions to meet the evolving needs of businesses and consumers in the digital age.

It's over !! But to leave you, here are tips and strategies for creating and growing your company or business.

Leave us a comment