Home Bankrate.com What is Fintech? (Video)

What is Fintech? (Video)

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The term fintech might conjure futuristic ideas of the merging of traditional finances with technology. But fintech already likely holds a prominent place in your daily life.

If you value the convenience of quick money transfers among friends and family, then you are already enjoying one aspect of fintech. An easy example of fintech includes any mobile payments you’ve made via Venmo, Apple Pay, Zelle or similar payment platforms.

But the term fintech applies to all kinds of products and services.

“The scope of fintech is massive now – thanks to technology, ” says Bill Clerico, co-founder and CEO of WePay, a Chase-owned company. “The rise of fintechs in the last decade has caught the attention of traditional financial institutions as an opportunity to enhance more personalized and robust services at a faster pace and to improve the overall customer experience.”

What else does the fintech umbrella include? Let’s find out.

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The name ‘fintech’ itself combines the two key components: finance and technology. The term became a word in 2018 but has been used by bankers and technologies for years.

The big idea behind fintech is to use technology to make traditional financial sectors safer, faster and more efficient. Fintech can be used to describe all sorts of companies, products and services.

“Fintech refers to any business that uses technology to enhance or automate financial services, transactions and processes,” says Matthew Dailly, the managing director at Tiger Financial. “It can be used in a wide range of applications and is probably most notable in mobile banking, but is equally as important and as much used in industries such as cryptocurrency and insurance.”

Fintech has far-reaching effects that range from anti-money laundering software that protects banks from fraud to the emergence of challenger banks that aim to disrupt traditional banking models.

With the help of fintech, the way that we interact with money and conduct financial business is changing every day.

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