The financial world is in constant change and it has evolved technologically
FinTech is a rising industry in which companies use technology to offer financial services in an efficient, fast, comfortable and trustworthy way. The word is formed from the contraction of the terms finance and technology.
A FinTech company offers a product that was traditionally offered by banking entities and that is now provided through the internet. Therefore, one of its main characteristics is its big technological base. FinTech companies use technology to make financial services available to the customer in a much more accessible and simpler way. Therefore, every financial product or service with a technological component will make part of the FinTech conglomerate.
How are FinTech companies born?
FinTech companies are generally startups that use technology as a decisive factor and that want to catch part of the market that is dominated by big companies. Therefore, innovation is their greatest asset, and above all, the ability to adapt to the market changes.
We probably have heard about PayPal more than once, that company that allows website payments and transfer money between users in a safe way. Well, that company is considered the oldest sister of FinTech companies because it has been operating for more than 20 years in the market.
What are FinTech work areas?
The finance world is very wide, which makes this sector very extensive. Most FinTech companies don’t have the objective of encompassing all types of finances; instead, they tend to focus on a certain area and establish the niche there. They discover shortcomings: an area in which traditional methods don’t work good enough or which are not capable of adapting quickly enough and develop their services. The most common areas are the following:
- Mobile banking
- Big data and promoting models
- Payments and transferences
- P2P lending
- Security and privacy
The highlight of the success is:
- Development of new technologies
- Ease of use
- Commodity of services, without the need of displacements
- Adaptation of the services to the customer’s needs
- Velocity and transparency of its services
- Flexibility to adapt to technological innovations
- Use of smartphones as a tool to make relationships
With this, FinTech companies expect to achieve some goals that can be summarized like this:
- Offering these financial services supported by technology.
- Adding value in order to make current financial services more efficient.
- Offering online financial products to avoid displacements by using their own smartphone.
- Reducing costs to make these financial alternatives more attractive.
FinTech companies are characterized by the usability and ease of use of its apps. That means that simplicity, innovation and the user’s added value prevails, which becomes a plus itself. The process is very simple, as all that it takes is to create an account and define the role as an investor, or services offeror or requestor. In this sector there are also many collaborative consumption platforms that further democratize access to financial services, generally with less obstacles and also with better conditions for the investor and the applicant.
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In conclusion, this is an area that is in constant growth because of the many advantages that the users offer. Besides, these companies are becoming more and more trustworthy, which favours even more the growth of FinTech.