How do I manage my e-money?

The different kinds of Fintech in the current market

What is Fintech?

Fintech is the result of “financial” and “technology”. It refers to any platform, app, software, or technology allowing people or businesses to digitally access, manage, or obtain insights into their finances or make financial transactions.

In the last decade, consumers adopted digital tools, and fintech began to rise with the idea of helping consumers address financial challenges and make progress toward financial goals. Consumers nowadays rely on fintech for a wide range of uses from banking and budgeting, to investments and lending, as well as for its tangible everyday benefits.

Fintech industry overview

The industry had impressive growth over the past few years. Only in the Americas, the number of fintech startups increased from 5,868 in 2018 to 10,755 in 2021. In the same year, global funding around fintech reached a record of $132 billion, 21% of all venture capital dollars.

Every major Fintech category saw record funding in 2021, indicating broad interest in the industry.

Types of Fintech

Fintech compose a wide range of use cases across business-to-business (B2B), business-to-consumer (B2C), and peer-to-peer (P2P) markets. The following are just some examples of the types of fintech that are currently changing the financial services industry.

Banking

Banking services have been shaken up by the fintech industry. Things like account opening and funding have become easy and online, offering flexible personal checking accounts, faster direct deposits, and even teen banking products, without traditional fees that can hinder people from achieving their financial goals.

Payments

Cashless payments are on the rise. Since the onset of the pandemic, cashless payments have made huge jumps. Payment apps and services have become more and more common. Receiving payments via direct bank transfer is significantly less expensive than using credit cards, and getting users signed up and authenticated has become faster and easier.

On the B2B side, companies like Yaydoo and Paystand created platforms for streamlining payments, collection and purchases. Managing and obtaining insights into the finances of the company.

B2B side, companies Paystand and Yaydoo home pages

Personal financial management (PFM)

PFM apps help users consolidate financial information from various accounts into a single dashboard, making it easier to stay up-to-date with their finances. These services help people to manage, budget and make sense of their money. Examples include Dave, Brigit, and Astra.

Dave, Astra and Brigit homepages

Wealth

Fintech solutions help financial advisors and wealth management use platforms that help them deliver more holistic financial advice. Atom Finance, for example, offers a suite of products and features to help users research and track all of their investments in one place. Stash is a subscription platform that gives customers easy and affordable access to investment, education, and financial advice products.

Stash and Atom finance platforms

Lending

Lenders often struggle to gain a full and accurate picture of their applicants due to the amount of work and time it takes to collect income information, account balances, and asset history. In addition, it can be a cumbersome process to get borrowers to connect their bank accounts to receive and repay loans.

Plaid streamlines the loan process for borrowers while giving lenders access to the user-permission bank, payroll, and other data they need to make informed lending decisions.

Plaid Interface preview

Fintech is democratizing financial services

Fintech democratizes financial services by making them more available to all consumers, especially those under and unbanked. With fintech, they can quickly open a bank account on their phones through a diverse range of fintech apps. Most fintech banks offer no-fee checking, overdraft protection, and offer no-cost early access to paychecks.

By democratizing access to financial services, fintech has created more options for consumers to improve their financial health and lives. It’s no wonder that all eyes are focused on where Fintech is headed next.

À bientôt amigos!