Author: In Am Nabila Binti Mohd Hashim
It has fast become one of the big buzzwords in business and technology. It’s one of the hottest properties to invest in and you can be sure it’s only going to get bigger and bigger but stick with us until the end and you’ll see how a lot of people have no idea what the word fintech even means.
You don’t need a degree in computer science or finance to figure out that it is an abbreviation for financial technology. However, it is important to shed some lighter on this hot topic.
Number one: Traditional banks are worried about it.
With good reason too that’s because until a few years ago banks had a tight hold on pretty much anything we did involving money and being the huge bloated dinosaurs that banks are there wasn’t exactly much incentive for them to innovate or be competitive fast forward a few years and a few leaps ahead in digital technology and it was time for smaller more agile players to make an entrance, you got it fintech and in the last decade they’ve been giving banks a real run for their money. As a innovation expert and fintech VC Arvind Sankharan says, “we’re witnessing the creative destruction of financial services, rearranging itself around the consumer. Who does this in the most relevant, exciting way using data and digital wins?”.
So, the more you see the word fintech cropping up in your news feeds you can be sure the more headaches old-fashioned bank managers are getting.
Number two: The term includes sectors you probably didn’t think were fintech.
Put simply fintech companies unbundle all the different types of financial transactions that banks traditionally do and as each fintech tends to specialize in just one area they focus on doing it in a way that’s efficient and streamlined and as user friendly as possible on a digital interface and at a low cost to the consumer. That includes platforms that are already obviously fintech like platforms that let you make payments online or in stores, square or PayPal platforms. That let you trade stocks like e-toro or Robinhood and anything digital you use to apply for a loan. The fintech label also includes cryptocurrencies and the crypto trading platform Coinbase and the so-called neo banks like chain transfer wise or revolute, but there are other players you may already be familiar with but hadn’t thought of as fintech.
Crowdfunding platforms are also considered fintech. So, it includes the likes of kick-starter and go fund me and if you make or receive payments via Patreon, you’re also using fintech or if you’vee raised (or donated) money via online charity fundraising platforms or Islamic Social Finance platforms (such as Finterra). That’s Fintech too and there’s fintech which specifically for Medicare. One example is Oscar an American health insurance company that uses IT shake up the health care system making it easier and more transparent; make medical claims all at a reasonable cost number.