Definition — What is Fintech?
The term FinTech is simply a combination of the words “Financial” and “Technology”. Technology has always changed the financial industry. However, the internet, combined with the widespread use of devices like smartphones and tablets, means the speed of this change has accelerated greatly in recent years. Fintech was introduced as a technology that was used at the back-end systems of financial institutions and banks. However, since then its definition has changed significantly. Now it encompasses several applications that include anything from mobile payment apps to cryptocurrency.
Take the simple example of a bank. A few decades ago for any cash transactions, like depositing or withdrawing cash we need to visit the bank and have to spend several hours. In today’s digital era, people are not keen to go for services provided by traditional banking sectors. Instead, they prefer services that are digitized, quick, and safe. Fintech has paved the way for several mobile apps which include banking apps too, that can take care of all our banking transactions at our fingertips from the comfort of our homes or workplaces. This is the important reason why fintech is gaining popularity and causing disruption in banking and other financial services. The global fintech market is expected to approach $310 billion by the end of 2022. In the wake of the COVID-19 pandemic, more and more businesses are turning to fintech to enable features like contactless payments or other tech-fueled transactions.