Fintech combines the words "finance" and "technology" into a single term. It describes any industry, product, or service that uses financial technology. The term is sometimes used in contrast with other tech categories, such as biotech and edtech.
Just like other businesses, financial companies must evolve and adapt over time. For example, if a bank does not offer online banking in 2021, it is unlikely to attract any customers. Therefore, fintech is a necessary component of any financial institution. Below is a list of different types of fintech a bank might employ.
- Mobile apps
- Mobile check scanning and deposits
- Online banking
- Electronic statements
- Automatic investing
- Account syncing with financial apps
Fintech also includes the underlying technologies that enable or simplify financial transactions. Examples include:
- Credit cards
- Chip readers
- Contactless payments (Apple Pay and Google Pay)
- NFC and Bluetooth wireless technologies
- Direct desposit and ACH payments
- Data encryption
In recent years, new financial technologies have emerged, providing new ways to save, spend, and invest money. Some examples are:
Because security and accuracy are critical to financial transactions, most fintech products and services incorporate secure technologies, such as encryption, TLS, HTTPS, and others. "Regtech," a subset of fintech, includes products and services used to regulate financial technologies.