Why Fintech Matters
Misunderstood by many, yet we all live by and with it
For the uninitiated, the term Fintech may be clouded in mystery and misconception. Some people think of it as a scam, others imagine difficult algorithms. In reality, we all use Fintech on a daily basis.
Simply put, FinTech means financial technology, and what it does is simplifies financial transactions between businesses and consumers, providing technological solutions for financial needs.
The Fintech stigma exists because scammers have always existed. And sometimes they call, email, or solicit people claiming to be a “Fintech company” that will double your investments in X amount of time. Similarly, there are scammers claiming to be traders, investment gurus, you name it.
Examples of Fintech that you already use
Online banking is everpresent in our daily lives. Those born prior to the mid-90s will still remember making regular visits to the local bank branch: sometimes it actually mattered and you indeed needed to visit specifically your branch.
Nowadays, we may make a visit to the bank to open an account and maybe another time to sign mortgage papers. In our day-to-day activities, online banking and banking apps do the trick.
Today, many are turning to the likes of Revolut, Wise, Vivid, you name it, for their daily banking needs. These neobanks don’t require a visit to a branch; accounts get opened in minutes literally in the palm of one’s hand.
New opportunities
Apart from the front-end solutions that we all use daily, there are a lot of back-end opportunities that Fintech is offering.
Blockchain technology is not just about some obscure cryptocurrency, it’s a verification method, a way to decentralize and revolutionize the world of finance. It’s used for transfers, contracts, logistics, NFTs, the list is endless.
Open banking is democratizing access to banking information in a way that can help financial institutions tailor specific products for you at a fraction of the cost. Insurance companies have caught on and are making use of this novel technology.
In fact, open banking platforms are some of the hottest startups in Europe. There are clear leaders such as Nordigen, but there are also Tink and TrueLayer that are quickly gaining ground.
Open banking usually comes in the form of an API for banks and companies, so most consumers might not be aware of the fact that they’re already using open banking (unless they read the fine print of their agreements).
The fact remains: open banking is here to stay.
Investing
Any investment platform or cryptocurrency exchange is also Fintech.
Who doesn’t enjoy playing around on Binance, Kraken, etc., and picking up some coins (or fractions of coins, if they’re the high-costing ones)?
Once you learn about staking and depositing your crypto, you may realize that its blockchain structure ends up paying more than traditional banks and is more transparent and interesting.
Into stocks? That’s also Fintech helping you earn (or lose) a buck and help run the economy.
Fintech shouldn’t be feared. It provides lots of useful services that we already use and lots of interesting opportunities. We just need to be careful and do our research, just like we’d do our research when choosing a bank.
