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What is FinTech? The Different Faces of Financial Technology

What is FinTech? The Different Faces of Financial Technology

What Is FinTech? The Different Faces Of Financial Technology

Fintech can be defined as “the evolving intersection of financial services and technology” (PWC). In a nutshell, the industries’ aim is to look at traditional financial functions and seek out areas where technology can make the current process more cost effective and hassle free for the customer.

Although the industry as a whole is referred to as fintech, in reality there are as many different categories to fintech as there are facets to the financial services industry.

The technology used can often overlap between the different sectors of fintech but below we’ll look at some of the most popular areas where financial technology continue to have the biggest impact


There’s no doubt that mobile and online payments have completely transformed the way we transact today. Younger generations are entirely oblivious to what a cheque might be and many experts believe the debit and credit card also face extinction in the not too distant future.

PayPal was not only one of the first fintech companies but also a pioneer when it came to digital payments. Many promising startups have emerged since then.

Ayden, an Amsterdam based payments processing platform, counts Uber, Netflix and Spotify as some of its clients and provides an all-encompassing payment solution with a global reach.

Established brands like Apple (Apple Pay) and Google (Google Wallet) have also realised the potential in this market and provides more mobile-focussed solutions.


Insurance is a necessity we are all exposed to in some shape or form and its one of the oldest industries in the world. It has remained unchanged for many years but a technological revolution has been sweeping through it in recent times.

From everyday health insurance startups like Clover and Oscar to car insurance providers like Driveway and Root Insurance, all working towards improving the customer experience and expectation. Then there’s of course also the very “21st century solutions”, like Digital Risks, that provides cover to online businesses specifically.


Regulatory technology is in high demand at the moment as regulatory bodies are putting an increasing amount of strict regulations firmly on the shoulders of financial services companies. Non-compliance often results in significant fines and serious reputational threats.

Organisations therefore need to find a way to not only analyse and apply heavy regulations but also do so in a cost-effective manner.

Sybenetix provides market surveillance and compliance monitoring to the financial services sector including banks, asset managers and hedge funds. Other promising startups that use technology to cut down costs and improve the automation of regulatory compliance include Risk Ident and Osis.


Lending money has traditionally been the territory of banks and credit unions. However, the public’s lingering distrust of conventional financial institutions and the sheer effort involved in taking out a loan from legacy banks mean that many fintech startups are now making a splash in this space.

Peer-to-peer lending platforms, like Zopa and Lendico, bypass banks and credit unions and bring individual lenders and borrowers into contact. This ideally means that lenders get more interest than on a traditional savings account and borrowers pay less interest than on a bank loan. There is however a risk for the lenders that their money won’t be repaid.

Other startups like borro, allow individuals to take out a non-recourse loan against luxury items like jewellery, antiques and even classic cars.

Equity crowdfunding

Equity crowdfunding makes it easier for individuals to invest in unlisted commercial companies, helping entrepreneurs to get their business of the ground and driving innovation along the way.

Without the online world, it would have made it very difficult and time consuming for ordinary people to invest in private companies. HelpTheCrowd and Crowdcube enable individuals to choose when, where and how much they want to invest.

Money transfer

As the world is getting smaller and smaller through globalisation, more and more people are looking to transfer money to a wide variety of countries in different currencies. In the past this would have been an expensive exercise. However, innovative fintech startups are taking the pain out of the process.

TransferWise cleverly matches buyers and sellers for each currency with the aim of cutting fees individuals and small businesses are charged on international transfers, while WeSwap focusses on swapping travel money directly with other users.

Digital wealth management and personal finance

One of the biggest benefits to the advancements made in financial technology has to be the power that it gives ordinary people to take control of their personal finances.

Thanks to fintech startups like Nutmeg and Betterment, individuals can invest in a diversified range of assets including equities, bonds, commodities and cash, all from the comfort of their home and at a fraction of the cost.

The reason this area of finance has become much more accessible is largely due to advancements made in the robo-advisory field, a technology that aims to automate a lot of the investment process and significantly reduce fees.

Digital Banking

The banking industry is perhaps in the biggest need for renewal and overhaul. It’s an old and slow moving dinosaur. Disruptive technologies in the banking industry have been a hot topic in recent years. Many of the above mentioned areas of fintech, like payments, lending and money transfer, will be incorporated within traditional financial institutions to create change.

Alternative banks like Atom, is entirely digital (no physical branches) and has thrown the old concept of banking out of the window completely.

Companies like Nymbus look at the core processes of established banks and credit unions and identify areas for improvement. This is easier said than done as banks are notoriously slow to adopt change, still relying heavily on out-dated, legacy systems. A measure of collaboration between banks and fintech companies is therefore needed to encourage transformation.


The list is by no means exhaustive. There are many more different categories of fintech, each with its own area of technology that they aim to improve and develop. It does however show the most important areas of where fintech has made a positive impact on our daily lives.