Fintech is a much-used word these days, but what is it exactly? And how does it differ from a traditional bank or payment or mobile money operator? Or from a traditional insurance company or wealth management advisory business?
Fintech is a combination of the words ‘financial’ and ‘technology’ that describes the use of technology to deliver financial services products to consumers that augments, digitises, or disrupts traditional financial services. This could be banking, insurance or investments, and although it’s a relatively new buzzword, it’s nothing new. The industry has been using technology in this way since the 1960s.
What is different now is the speed of change caused by the Internet, widespread use by consumers of smartphones and tablets that has accelerated the speed of change over the last few years.
Like many buzzwords, it has spawned derivatives such as Insurtech (insurance specific) and Regtech (financial services regulation specific), Wealthtech and Investech (online wealth management investment).
When asked “what is a Fintech?”, most people think of mobile phone app-based offerings from new banks with trendy names. As you will come to learn, Fintech is the combination of two words.
In this module, we’ll consider the impact of Fintechs and their technology on the banking, insurance, and wealth management segments of financial services.
It is banking where Fintechs have traditionally had the earliest and biggest impression on incumbent businesses and their customers. But the valuable insurance and wealth management segments are under scrutiny.
Fintech is also influencing other business sectors such as accountancy and influencing how businesses invoice customers and calculate and pay their taxes.