March 29, 2024

15 Things You Didn’t Know About the Fintech Industry



Published May 16, 2023, 7:20 a.m. by Arrik Motley


1. The fintech industry is growing at an unprecedented rate.

2. fintech startups are attracting big investments from established financial institutions.

3. fintech is helping to drive the adoption of new technologies in the financial sector.

4. fintech is changing the way people interact with their finances.

5. fintech is making it easier for people to access financial services.

6. fintech is helping to democratize finance.

7. fintech is providing new opportunities for financial inclusion.

8. fintech is helping to reduce the cost of financial services.

9. fintech is increasing competition in the financial sector.

10. fintech is enabling the development of new business models in finance.

11. fintech is playing a role in the transformation of the banking sector.

12. fintech is impacting the insurance industry.

13. fintech is contributing to the growth of the sharing economy.

14. fintech is transforming the payments industry.

15. fintech is changing the way we think about money.

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it's fast become one of the big

buzzwords in business and technology

it's one of the hottest properties to

invest in and you can be sure it's only

going to get bigger and bigger

but stick with us until the end and

you'll see how a lot of people have no

idea what the word fintech even means

welcome to alux.com the place where

future billionaires come to get inspired

if you're not subscribed yet you're

missing out

you don't need a degree in computer

science or finance to figure out it's an

abbreviation for

financial technology but when it comes

to fintech

whether you're in the dark or well clued

up we thought we'd shed a bit more light

on this hot topic

number one traditional banks are worried

about it

and with good reason too that's because

until a few years ago banks had a tight

hold on pretty much

anything we did involving money and

being the huge

bloated dinosaurs that banks are there

wasn't exactly much

incentive for them to innovate or be

competitive fast forward a few years and

a few leaps ahead in digital technology

and it was time for smaller more agile

players to make an entrance

you got it fintech and in the last

decade they've been giving banks a real

run for their money

as innovation expert and fintech vc

arvind

sankharan put it we're witnessing the

creative destruction of financial

services

rearranging itself around the consumer

who does this in the most relevant

exciting way using data and digital wins

so the more you see the word fintech

cropping up in your news feeds

you can be sure the more headaches

old-fashioned bank managers are getting

number two the term includes sectors you

probably didn't think were fintech

put simply fintech companies unbundle

all the different types of financial

transactions that banks traditionally do

and as each fintech tends to specialize

in just one area

they focus on doing it in a way that's

efficient and streamlined and as user

friendly as possible

on a digital interface and at a low cost

to the consumer

that includes platforms that are already

fairly obviously fintech

like platforms that let you make

payments online or in stores

square or paypal platforms that let you

trade stocks

like etoro or robinhood and anything

digital you use to apply for a loan

the fintech label also includes

cryptocurrencies and the crypto trading

platform coinbase

and the so-called neo banks like chime

transferwise or revolut but there are

other players you may already be

familiar with but hadn't thought of as

fintech

crowdfunding is also considered fintech

so it includes the likes of kickstarter

and gofundme

and if you make or receive payments via

patreon you're also using fintech

or if you've raised money or donated

money via online charity fundraising

platforms

that's fintech too and there's fintech

specifically for medicare

one example is oscar an american health

insurance company that uses

i.t to shake up the health care system

making it easier and more transparent to

make medical

claims all at a reasonable cost

number three it's lifted millions of

people out of extreme poverty

one thing that fintech does a great job

of is bringing financial services

to people who couldn't access them

before often that means people who

didn't have a regular income

or a permanent address and fintechs

allowing them to build wealth and escape

the poverty trap

a case in point is m-pesa it was

released in kenya in 2007

and basically transforms your smartphone

into a bank account

it allows users to make and receive

payments make online deposits all in a

secure way

and it gets credit for having reduced

crime in a society that used to be

mostly cash

and prone to theft in fact since m-pesa

was launched in 2007

it's raised 2 percent of kenyans around

200

000 households out of poverty as well as

many other people in different countries

throughout africa where it's also used

and we think that all of this

means fintech deserves some serious

kudos

number four it's revolutionizing the

loans market

looking and applying for a loan is a

great example of how traditional banks

were drowning in bureaucracy

and how fintech has shown us all it can

be improved and streamlined for a lower

cost

now it's possible to find a whole range

of apps and websites that help you

compare prices of credit card loans

in a way that banks didn't used to do

that includes

peer-to-peer lending platforms like

prosper marketplace and a lending club

sites for business loans like cabbage

and lendio

and fintechs that lets you apply for

mortgages which take traditional brokers

out of the equation and approve loans

faster

and in 2016 american fintech sofi

which helps with student loan

refinancing became the first online

lender to get a

aaa credit rating number five

they could make traditional credit

ratings obsolete

anybody who's ever taken out a loan

knows how your credit rating is the holy

grail when it comes to being able to

access money

a bad credit score shuts off all kinds

of opportunities and it's difficult to

shake off

this is something else that fintech has

been busy disrupting

that's thanks to fintech lenders like

affirm which offers loans to people with

bad or no credit ratings and also helps

them build up their credit rating

or upstart which uses totally different

data than usual

like employment history to determine how

creditworthy you are

and all this means that soon enough we

could be seeing the end of credit

ratings as we know them

number six cyber security is still a big

concern

of course it comes with the nature of

fintech companies that they would hold

huge amounts of sensitive data

and there are high risks if all of that

gets stolen and along with all of the

good news around fintech

it's worth noting it's not all rosy we

do need to be careful

figures from last year show that 27

percent of fintech companies have

experienced a security incident

and 29 aren't sure because they haven't

checked

with more investment and more

transactions being made through fintech

this is likely to improve in the future

but it still goes to show just how

seriously we should be taking cyber

security

and while we're on the topic we're going

to take the opportunity to strongly

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to online security and

make the smart choice number seven

investment in fintech is going up

exponentially

with so many movers and shakers of the

last decade being fintech

this one shouldn't come as that much of

a surprise over 300 billion dollars has

been invested in fintech in the past

decade and according to goldman sachs

the market worth of all fintech firms is

4.7 trillion dollars

that includes investments made by big

tech firms into their own platforms

like apple pay and google wallet as well

as the financing that's been secured by

a large number of startups which is

about 12

000 fintech startups across the world

number eight the word fintech originally

described the backend technologies of

traditional banks

the first time most of us heard the word

fintech was probably sometime in the

last decade but the first recorded use

of it goes back a lot further to 1971.

it was originally used to describe the

back-end technology

used by banks and big financial

institutions kind of ironic seeing as

now we use it to talk about their

competition

and the first fintech that really went

global is a company we all know well

paypal which launched in 1998 by one of

our favorite people here at alux elon

musk

although it wasn't until quite a bit

later the term fintech was used more

widely

number nine it's a huge user of machine

learning

as fintech offers cutting-edge products

it stands to reason they use the most

cutting-edge new technologies

and are some of the biggest users of

them and none more so than machine

learning and ai

one of fintech's most famous uses of ai

is in so-called robo-advisors

now sure they might sound like

armor-clad law enforcement agents from a

dystopian future

but the word actually refers to

algorithms that automate investment

advice

and basically they do the same job as

financial advisors but at a lower cost

and another way fintech companies use ai

is in their cyber security to fight

online fraud

they do this with computer programs that

use information about your payment

history to flag up transactions that are

outside of the norm

number 10 and other new technologies too

yep fintech uses all kinds of new

technologies

like chat bots which assist customers

with basic tasks and cut down staffing

costs

or an area called predictive behavior

analytics used in car insurance apps

like route insurance

basically the app tracks a driver's

movements and assesses their driving

skills

and adjusts the premium rates based on

their performance behind the wheel

and of course blockchain which was

developed specifically to record

transactions of bitcoin and is closely

connected with one of the most talked

about areas of fintech

crypto number 11.

they can improve your spending decisions

in case you're one of those people who

finds it difficult to make the right

decisions when it comes to money

we've got good news for you it could be

fintech that saves the day

that's because one area of fintech

that's been getting lots of users are

personal finance apps

with apps like mint money dashboard and

credit karma you can use budgeting

functions to help you spend less and hit

your savings goals

and some apps use gamification to add

some fun into saving which is not

usually known as the most

fun activity to do as practical as it

may be and a lot of research

shows that they actually work and help

people save more money and feel more

satisfied about their spending decisions

number 12 the world's biggest fintech is

a subsidiary of alibaba

for those of you who don't spend a lot

of time in china it might not be that

familiar a name to you

but at the moment the world's biggest

fintech company is chinese ant group

valued at over 60 billion dollars and

with 10 000 employees

it also owns several major financial

services like alipay

the largest online payment platform

ua-bow

the world's third largest market fund

and a credit rating system

sesame credit and if you've been paying

attention when you heard that one of

these services

is called alipay it probably didn't take

you long to figure out that it's part of

the alibaba group

which means along with apple pay google

wallet and jack dorsey's

square they're one of several fintech

companies that have a regular tech

company backing them up

number 13. asia is the biggest consumer

of fintechs

that's not just in terms of the number

of people using them but also the

percentage of the population

according to an ernst young survey china

and india have the biggest fintech usage

both with 87 percent of people regularly

using fintech

while south africa was in the third spot

with an adoption rate of 82 percent

number 14 but the usa is the biggest

producer it won't come as much of a

surprise that silicon valley has the

highest concentration of fintech space

there

but there may be a few surprises on the

list of the world's top 10 fintechs

especially if you weren't expecting to

see any baltic countries make the top

ten

but two of them do lithuania in fourth

place

and estonia at number 10. after north

america

asia is the second biggest home of

fintechs with singapore taking third

place

globally number 15.

fintech is known for its relaxed work

ethic

traditional banks have always been seen

as stuffy and old-fashioned places to

work

not exactly the kind of workplace you

can roll up to in jeans and a t-shirt

but in their relentless quest to

modernize the world of finance

fintech has gone in the opposite

direction fintech workplaces are known

for their casual dress code

as well as perks like staff happy hours

and in-office yoga classes

and that's something that's posing a

threat to traditional banks as

fintechs are finding more and more ways

to bag top talent in finance

so alexers what other changes in the way

we use money do you think fintech will

bring to us in the future

let us know in the comments now for

sticking with us until the end

here's your bonus it may be

revolutionizing money

but most people still don't know what

fintech is

fintech is all around us more and more

of us are using it

more and more money is changing hands

through it and fintech companies are

getting more investment

but according to an ernst young survey

made in the usa 63 percent of people

have never even heard the term fintech

before

as well as those that couldn't recall

having ever heard the word fintech

another 21 said they'd heard the word

but had no idea what it meant

and only 16 could even attempt to give a

definition

hey luxers we know how you like to stay

well informed when it comes to the

important things happening in our world

so we're sure a lot of you were in that

16

and we're well clued up on ventec and we

hope you now know even more about it

after watching the video

and if you weren't in that 16 don't

worry we're confident you know what it

means now

if you enjoyed this video be sure to hit

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