When most people think of financial technology, they envision the newest cutting-edge concepts like blockchain and cryptocurrency. But fintech also encompasses a wide range of much more mundane uses for new technologies that streamline more traditional finance functions.
For example, banks use new tools to automate customer service and cut down on staffing costs. They also use new technology to fight fraud by analyzing patterns of behavior and checking for anomalies in customer payment history. In short, fintech is a way for established banking and investment firms to take advantage of the latest innovations in technology to improve the efficiency of their services.
Some examples of this are robo-advisors that use algorithms to provide financial planning and investment advice with little or no human intervention. Other applications of fintech include digital banks (neobanks) that are growing in popularity with younger, tech-savvy consumers and don’t have physical branches. These use technologies like Open Banking and Banking as a Service to allow third-party companies access to data and to make it easier to launch banking products.
Other types of fintech include payment apps that let people send money with their phones; P2P lending platforms such as Zopa and Lending Club that connect borrowers and lenders; and automated trading systems that run algorithmic trading on behalf of investors. But many of the most exciting innovations in fintech are those that address issues of accessibility and inclusion. These include mortgage lenders Novo and Varo, which provide free bank accounts to low-income borrowers; Greenwood Bank and the MoCaFi platform, which work to narrow the racial wealth gap; and cryptocurencies such as bitcoin that don’t require intermediaries and facilitate transactions with greater anonymity. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/
