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FinTech is the combination of “financial technology” that is usually used to describe new technologies and products which could improve the efficiency and effectiveness of financial services. ​​​It is implemented to help companies, business owners, and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and smartphones. [1] Generally speaking, FinTech is involved in several financial activities, such as online and wire transfers, depositing a check with smartphone, bypassing a bank branch to apply for credit, raising money for a business startup, or managing your investments, etc. And all of them are done without the assistance of any person.

Broadly, the term “financial technology” can apply to any innovation in how people transact business, from the invention of digital money to double-entry bookkeeping. Revolutions on the internet and mobile devices/smartphone triggers an explosive growth in both finance and  technology industry. As a result, FinTech, which is originally referred to computer technology applied to trading firms, is developed in recent years to describes a broad variety of technological interventions into personal and commercial finance.

The two most traditional examples of FinTech are crowdfunding platform and blockchain/cryptocurrency. Crowdfunding platforms allow internet and app users to send or receive money from others on the platform, and have allowed individuals or businesses to pool funding from a variety of sources all in the same place. Instead of going to a traditional bank for a loan, individuals are now possible to go straight to other investors for support of a project or company.

On the other hand, Cryptocurrency exchanges like Coinbase and Gemini connect users to buying or selling cryptocurrencies like bitcoin or Litecoin, and blockchain services like BlockVerify help reduce fraud by keeping provenance data on the blockchain. While cryptocurrency and blockchain may be somewhat controversial uses of FinTech due to their special characteristics, they have certainly taken parts of the investment world by storm in recent years. [2]

There are four broad categories of users for FinTech: B2B for banks, their business clients, B2C for small businesses, and consumers. Trends toward mobile banking, increased information, data and more accurate analytics and decentralization of access will create opportunities for all four groups to interact in unprecedented ways. [1]

Since FinTech is closely associated with technology, especially computer science, it tends to target at consumers that could catch up with the society. As for them, as with most technology, the younger and the wealthier a consumer is, the more likely he will be aware of its value and can accurately describe what FinTech is.

Work Cited

  1. Gakman, Courtney; Understanding FinTech Categories; Ian Martin;
  2. Kagan, Julia; FinTech; Investopedia; May.17th, 2019;

Full Disclosure: Nothing on this site should ever be considered to be paid/official advice, professional research or an invitation to buy or sell any securities. The information contained is simply research, personal opinion, understanding and thoughts of the author.

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