Experts estimate that the global fintech market will be worth over $300 billion by 2022.
Fintech (or financial technology, to give it its proper name) offers savers and investors dynamic new ways to grow their money pot. It’s also helpful to many different kinds of businesses.
However, many people are still unclear as to what fintech is and how it works.
So exactly what is fintech? Read on as we look at the various answers to this question.
What Is Fintech?
To use a simple definition, fintech is any technology that is used in the financial industry.
- ATMs, therefore, are fintech,
- as are credit and debit cards.
Of course, in a modern context, that’s not what the term is used to refer to. As technology continues to improve, financial tools have become more and more sophisticated.
In 2020, fintech mainly involves highly developed online financial management. Programmers are in constant competition to deliver computerized solutions that are cheaper, more efficient, and more convenient.
These are relevant to traders, but also to regular businesses and individuals.
Examples of Fintech in Practice
There are many areas where fintech has become a tool, if not a necessity. We look at a few of the main ones here.
Capital markets involve a lot more nowadays than just buying and selling company shares.
- Algorithmic trading,
- blockchain, and
- cryptocurrencies have all become hugely important for investors.
As technology improves, the use of these tools is likely to keep changing. While that doesn’t necessarily affect the retail investor who’s looking for a safe investment for retirement, it means that professional traders have a lot to keep up with.
Fintech is good news for many businesses, but it’s also highly relevant to the ordinary consumer. More and more people are managing their financial lives on a screen rather than in a physical bank branch.
When they look to the future of fintech, many commentators see that the days of cash use in person-to-person transactions are swiftly drawing to a close.
Financial technology has also drastically changed the way charities and other crowdfunding operations do business.
Once, such organizations would have been reliant on cash collections. This was slow and labor-intensive.
Thanks to technology, however, crowdfunding can now be carried out by one person on a computer.
When you’re buying goods online, you obviously can’t pay with cash. eCommerce has been reliant on fintech solutions from the start, and is benefiting hugely from their proliferation.
Streamlined payment solutions are doing a lot for online business in terms of reliability, efficiency, and consumer trust.
Getting the Right Fintech Solutions in 2020
So what is Fintech? You should, by now, be starting to realize that there is no easy answer to this question. Fintech is many different things to different people and entities.
However, it could be the solution to many problems around the world.
Did you find this article informative? If so, you should read some of our other content. Our posts cover everything to do with finance!
AUTHOR LaTia Longuemire
My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.