The term Fintech refers to those companies or startups that provide financial services using “innovative” digital technology to offer products and services with high added value, it is also known as Fintech to the industry that applies new technologies to financial activities and investment, through new applications, processes, products or business models in the financial services industry.
Is it a threat to the traditional banking sector?
Many believe that Fintech companies and startups have become a “threat” to the traditional banking sector, however, this is far from the reality since Fintech and/or financial startups can coexist collaborating with traditional banking, creating synergies for creating more competitive products and services that benefit the end-user.
Banking entities and Fintech in the future
It is expected that in the short and medium-term, banking entities could become competitive financial service providers, integrating their own products and services as well as those of third parties (Fintech). It is important to note that Fintech companies play an important role in this path, which means that there will be significant changes in the traditional financial sector, by integrating financial products and services (of high value for the user) developed by Fintech companies.
What do Fintech companies do?
Fintech companies develop different tools, applications, platforms, and “tailored” programs for the banking and financial system, Fintech in many cases acts as a kind of “intermediary” between the bank and the end-user, through the use of a platform technology online.
Some examples of financial products or services developed by Fintechs
- Mobile Wallets: they are solutions for making payments with credit/debit cards or cryptocurrencies using mobile devices.
- Virtual currencies: solutions to make payments with Bitcoin or other cryptocurrencies.
- Money transfers: online services for sending or receiving money from and to anywhere in the world.
- Technological solutions for financial entities: they are technological tools and digital banking platforms, their purpose is to enhance communication and collaboration between banking entities and their clients, to provide efficient financial products and services.
- Mobile financial solutions in developing countries: these are mobile platforms for developing countries, aimed at banks, telecommunications operators, and financial institutions.
- Mobile transactions: these are mobile platforms to make small payments between individuals and the loyalty of customers in physical stores.
What do you think about this topic? Are you already using a product or service from a Fintech company?
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