With the advent of digital technology, financial services firms have transformed the way they operate and deliver value to consumers. McKinsey defines fintech as the use of software, data and analytics to provide financial services more efficiently. It covers a broad range of technologies used to manage money, from online payments and digital banking to investment platforms and automated trading.
Financial technology is a newer development than many realize, albeit one that’s been enabled by advances in general digital tech for decades. The first ATMs began to appear in 1967, and the launch of PayPal in 1998 pointed to a greater trend toward digital payment systems. However, it wasn’t until the global financial crisis of 2008 that fintech really took off, spurring companies to find ways to make existing processes more efficient and improve an overall system that’s been in place for centuries.
Fintech is an ever-evolving category that encompasses all kinds of products and services that utilize technology to perform fundamental functions provided by financial institutions – like holding money (deposits, securities), lending money (secured or unsecured loans), moving and paying money (including international money transfers through global networks such as SWIFT). The most talked-about fintechs are those that challenge established, traditional financial service providers because they’re nimbler or better at providing certain types of products. Examples include all-in-one money management apps such as Mint, stock or cryptocurrency trading platforms, peer-to-peer lending platforms that connect borrowers and lenders directly, and insurtech (insurance) companies that streamline application and claims processes. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/