FinTech, short for Financial Technology, is the application of technology for any given financial service. If you’ve ever used PayPal, Venmo, Apple Pay, or simply used your credit card while making an online purchase, you’ve used a form of FinTech. Even looking online for the best mortgage rate is considered FinTech so you might be more familiar with it than you think.
While FinTech has a futuristic or modern ring to it, it actually has been around for as long as any financial services have been. The financial crisis the world saw back in 2008 has evolved FinTech into what we know today. Almost all companies use FinTech to manage their financial aspects of the business, which includes new software, processes, and business models.
Some of the popular innovations of FinTech over the past decade have changed the way we conduct business. Crowdfunding is making it easier than ever to create a startup. No need to find an investor or have good credit to be approved for a loan when you have the ease of raising money from people all over the world. The preference of online shopping is leading to the dominance of cashless transactions. Accepting payments has become a breeze. Tools such as PayPal and Square are giving business access to cashless payments, even at places like farm stands. Currencies are easily being converted with apps like PayPal for international transactions.
One incredible FinTech tool already in existence is Acorns. This app connects with your bank account and works by investing your spare digital change. Every purchase that you make with your card will be rounded up to the nearest dollar by Acorns which then invests the difference on your behalf, working to make you money without costing you much money.
Consumers are now so accustomed to the ability to access data and information wherever they are and whenever they want that they expect it from all aspects of finance they use. They expect every shop they visit, whether big or small, to accept credit cards. With all of the ways people are now able to pay with their phones, it won’t be surprising for that expectation to come about in just a few short years.
This level of FinTech is only in its infancy. Rapid changes are happening to this industry every day. Businesses who do not embrace these changes will surely not survive. Those who adapt well to the growing changes and integrate the new technologies into their business plan will be at the forefront of their markets.