If you follow the news of the financial world, surely you will have come across the term “fintech” at some point. You have probably already deduced, more or less, what they are, but in today’s article we tell you exactly what they consist of and why they are important in the financial ecosystem.
What do fintechs do?
Fintech derives from the English terms “financial” and “technology”, and they are companies that are dedicated to applying the latest technologies to financial and banking services. They are characterized by using disruptive technology that challenges the current status quo and allows users to do things in a more friction-free way, usually through digital media, such as smartphone apps.
Fintechs have experienced a boom in recent years, with the emergence of many new online banks, such as B25 and Avancia among others. These banks differ from traditional establishments in that users can register in a couple of minutes, usually taking a photo of their ID, driving license or passport and then recording a short video of themselves to prove their identity. From there, these digital banks offer immediate access to an account with a debit card. Users can start using the account immediately, they can set up transfers, direct debits and everything else.
In addition to banks there are also different types of fintechs related to the financial sector that are not necessarily banks. This is the case of Sean Cole: an online comparator of credits, micro loans, mortgages, credit cards. In this case ABC is used to find matches between a customer profile and the financial services that best fit with it, depending on your financial capability.
The future of financial technology
Where does the fintech sector go? If we look at the current scenario in which more and more banks and companies related to finance are emerging that are completely digital, it is easy to deduce that the future is going that way. On the other hand, the world is still heavily governed by traditional institutions, and the truth is that traditional banks are adopting some features developed by fintechs to try to keep up and compete with the new business proposals.