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What is Fintech? – Definition, Types and More
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What is Fintech? – Definition, Types and More

With the proliferation of financing systems through the internet, various fintech business models have been generated whose objective is to streamline the economic operations of companies, corporations, and individuals through platforms based on financial technology.

Fintech is here to stay. They base their strength on applied technology to provide answers to users of financial products. In a way, they have democratized the way financing circulates, quickly cutting the ground in many cases to traditional financing and fund management formulas. One of the closest cases is that of online banking or direct banks. Although currently, numerous ways of startup Fintech are opening up new horizons.

What Does Fintech Mean?

Fintech is a word that comes from the union of two terms Finance and Technology. Besides, these are companies that give their customers innovative financial products and services through the use of ICT technologies.

In addition, these startups use financial technology as a means to reduce costs and simplify processes. And resulting inefficient internet service for the user, while generating lower commissions compared to traditional systems.

In summary, Fintech means the union of technology and finance intending to create financial services that are easy to contract. And understand with a standardized price that allows access to a greater number of people and companies, both investors and borrowers. The digitization of the financial sector is here to stay.

finance and technology

Fintech Types

Different types cover different financial branches, of which we can highlight the following:

Financing of Individuals and Companies

These are a series of companies whose primary work is based on consulting. And also, financial support to small and medium-sized companies through specialized websites.

Transfer of Funds

These companies managed to break the monopoly of banking entities, creating better money transaction mechanisms with lower costs. Some examples are Transferwise, Kantox, and Flywire.

Financial and investment advice

Also known as the Robo Advisor. The use of this technology by various Fintech companies in this area has enabled the automation of financial advisory processes for SMEs, startups, private users, etc. In addition, the decrease in costs and the elimination of advisory fees has opened a wide field for investors with fewer resources. In other words, you don’t waste time, and you only pay when you hire a service.

Payments and Collections Through Smartphone and Mobile devices

The use of mobile applications to transfer and receive money faster and easier, without going to a bank, has become widespread in recent years.

Investment

A platform where any individual can invest economic resources in businesses or companies that make use of this means to finance themselves.

Personal Finance

They usually work through apps, and their mission is to facilitate the understanding of accounts by users: Income and expenses, treasury, direct debits, etc. Updated information on accounts and movements made.

Also Read: How to Apply IoT Projects in your Company?

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