FinTech or Financial Technology is an innovative use of technology in the delivery of financial services. FinTech is a new industry that uses technology to improve financial services efficiency. Active companies in FinTech are usually startups trying to improve and develop their services and create a challenge for traditional financial companies.
National Digital Research Centre in Dublin, Ireland define FinTech as:
Innovation in financial services; this title is used for a wide range of technological applications that are used in a product’s supply chain.
FinTech is one of the new interests of the investors and has become one of the most important areas for entrepreneurs to start up innovative businesses.
FinTech current position:
FinTech does not only include startups and small newly established companies. Great companies like Paypal, are considered as the founders of FinTech because they had provided innovative services too, but now most of the active companies in FinTech are small or moderate corporations. Most of these companies seek to connect people and businesses to each other one to one and point to point in order to reduce brokers and payments cost during the transactions. FinTech businesses can be categorized into 8 groups:
- Encoded currencies such as Bitcoin
- WealthTech or investment related business
- Personal financial management
- Lending and group finance
- Remittance or international money transfer
- insurance or insurance technology-related businesses
- RegTech or legislation related businesses
Creating changes in the financial and banking industry with the following three basic principles
• reduction in costs (While maintaining quality and increasing financial services)
• Breaking time and geographical constraints
• Intelligent ability to evaluate possible risks
FinTech startups earned about 17.4 million dollars in 2016 and this amount increased to 83.3 million dollars by the end of 2017. Most of the FinTech startups are in North America and also Asians are following them more than ever.
FinTech will be improved in many areas, include: