Fintech stands for financial technology. It is the umbrella term for all technology that can be used to enhance, streamline, digitize, or disrupt traditional financial services.
Fintech is software, algorithms, and applications that can be used with both mobile and computer-based tools. It may also include hardware in some cases such as smart, connected piggybanks or virtual reality (VR), trading platforms. Fintech platforms allow you to do everyday tasks such as depositing checks, moving money between accounts, paying bills, or applying for financial assistance. These platforms also include technical concepts such as peer-to-peer lending and crypto exchanges.
The i2ifacility compilation highlights some of the most popular platforms on the market. The 2022 list featured companies such as Chime, which provides financial technology services and whose debit cards are issued by Stride Bank or The Bancorp Bank. Affirm is a resource for instant fixed-rate point-of-sale loans and Affirm. Stripe was also a popular investor choice this year with a $1B confidence vote from Sequoia Capital and General Catalyst, as well as funding from Visa, Visa, and Visa.
Fintech can be branched into many more specific industries, including health tech (apps such as Wealthsimple, an investment management service), insurtech, like Next Insurance, a mobile-first insurer, and invest tech (like Acorns which allows users to round up purchases up to one dollar). There are many uses for it in almost every industry and business model.
Banks use fintech for both back-end processes–behind-the-scenes monitoring of account activity, for instance–and consumer-facing solutions, like the app you use for checking your balance. Fintech is used by individuals for everything, including tax calculations and market research.
Fintech is used by businesses for payments processing, e-commerce transactions and accounting. More businesses are turning to fintech in the wake of the COVID-19 epidemic to enable features such as contactless payment and other tech-fueled transactions.