The Ever Expanding Definition of Fintech

According to Investopedia, “Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century”. Originally, the term described technology applied to the back-end of established consumer and trade financial institutions. Since then that definition has expanded significantly to include any technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment and even crypto-currencies like bitcoin.
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But today as we review the Fintech ecosystem, the term Fintech in itself fails to capture its true impact and significance as a ecosystem bringing together a number of different functions and impact under the umbrella term Fintech. Using the word Fintech is analogous to using the word retailer. It’s too vague to give you (whether consumer or service provider) a real idea of the myriad of different application, efficiency gains, accessibility and profit making possibilities.

On a daily basis, Crowd Valley (a Grow VC Group company) engages in conversations with clients from a range of different industries, demographics and backgrounds, a number of them unrelated to the conventional financial services space and they all echo a few common themes which can be woven together to define Fintech as one of the following:

• systems that boost efficiency, accessibility and profitability;
• the ecosystem that has facilitated the alignment of public and private gain (renewable energy, healthtech, insurtech);
• technology that democratizes the investment space and creates new investment channels and new classes of global investors and entrepreneurs.

According to Chris Skinner, Fintech extends to Regtech for Regulatory Technologies; Wealthtech for Wealth Management Technologies; Insurtech for Insurance Technologies; and so on. On top of that, Fintech has gained subcategories like Lending, Analytics, Digital Identity, Cybersecurity, SME and Student Financing, Payments, Robo-advice, Blockchain Distributed Ledgers, Neobanking, and more. Then there are also some generic technologies around Cloud, the Internet of Things, Artificial Intelligence, Machine Learning, Biometrics and others that are also creating Fintech themes and impacts. These can also be surmised into 3 streams:

• creating new financial infrastructure;
• removing friction from financial markets;
• reducing costs & overcoming inefficiencies.

But Fintech goes beyond just banking and the diversified financial services space. It’s a means to change the way any business works and the way a business or a person may interact, exchange information and transact with each other. APIs are facilitating this synergy at a breathtaking pace and allow a number of functions or processes to be integrated into single interfaces. With API’s your business’ digital interface could be empowered to provide the latest data on the website.

If this piece struck a chord with you, feel free to get in touch with us at Crowd Valley. We’d be happy to have a discussion about how our API framework and Cloud Back Office could help you.

Read the whole article and more details on Crowd Valley News.