Fintech is short for financial technology, and it encompasses the myriad of ways that the digital age is transforming the finance industry. The convergence of the internet, mobile phones, the cloud, and other technologies have made it possible to deliver financial services more easily, at lower costs, and in new ways. Understanding the capabilities of fintech, as well as the regulations governing their use, is thus important to understanding finance today whether you’re working at an established bank or a startup.
While the fintech ecosystem is complex and steadily expanding, most applications fall into one of two categories. Many important areas of innovation in fintech are focused on enhancing the convenience and efficiency of traditional financial services, including payment processing, online lending, investment management, and credit technology. However, there is also a growing interest in more disruptive applications that make it possible to bypass legacy institutions altogether, such as crowdfunding investment and lending platforms as well as cryptocurrencies enabled by blockchain technology.