The advantages of modern financial technology
Fintech is – in short – a collective term for innovative technologies in the field of financial services. Thanks to digital financial instruments, it is possible to invest money, make online pension provision or make cashless payments with just a few clicks. Fintech also refers to companies that develop and launch new types of financial technologies. This is why it is often referred to as a Fintech sector or Fintech industry. As a user, Fintech solutions offer you several advantages.
What does the term Fintech mean?
Fintech is an artificial word - more precisely: a so-called nested word. It is made up of two English terms:
In German, Fintech is a combination of the two German words Finanzdienstleistungen (financial services) and Technologie (technology) and is also referred to as Finanztechnologie (financial technology).
What is Fintech?
Fintech refers to new technological solutions that further develop the financial services sector and make financial products even easier for users. The smart applications of financial service providers can be used online via computer or mobile via smartphone app. Digital technology is being used in more and more areas of the financial sector.
What is the goal of Fintech?
The aim of Fintech innovations is to make the use of financial instruments more flexible, transparent, simple and convenient – and to adapt them to today's requirements. At the same time, the smart solutions of Fintech companies enable people to manage their financial affairs freely and independently – from banking to insurances. Nobody needs a bank advisor or insurance broker as an intermediary anymore. This saves time and costs.
Which Fintech providers are there?
In the Fintech industry there are different types of suppliers:
Fintech start-ups are young, innovative companies in the field of technology and software development. They usually operate independently. However, some start-ups also belong to larger companies from the financial sector.
Many banks and insurance companies run their own Fintech departments that develop smart financial products. Others cooperate with external Fintechs.
The largest Fintech companies are based in the USA, China and Great Britain. But there are also many successful start-ups in Germany. The most important hubs for German FinTechs are located in Berlin, Munich, Frankfurt and Hamburg.
In which markets are Fintech solutions applied?
The innovations of the Fintech sector are used in many different markets. Here are some examples:
Account management: With online banking and practical apps you can carry out your financial transactions digitally.
Payment services: Why look for the nearest cash dispenser? With Pay Tech you can make cashless payments.
Blockchain: The revolutionary Blockchain technology allows an anonymous, secure, transparent and independent control of monetary values. It is the basis for cryptocurrencies such as Bitcoin and the tokenization of tangible assets.
Monetary investment: Whether buying shares via Social Trading, investing in passive index funds (ETFs) or even in real estate and premium tangible assets with digital offers from Fintechs you can invest your money yourself.
Retirement arangements: Solutions for smart retirement arrangements are an important sector in the Fintech industry. You can invest your pension account online and manage it yourself.
Financial advice: Which financial products suit best? Fintech solutions can also help with this question. A Robo-Advisor, for example, selects suitable investment products according to individual specifications – and often smarter than any banker.
Loans: Need money? You no longer need to go to the bank for it. Peer-to-peer loans and crowdlending are used to finance both personal loans and corporate loans.
Insurance: In the past there were insurance brokers - today you can find the right insurance online and insure yourself directly
What does the future of Fintech look like?
Fintech start-ups of today work on the financial trends of tomorrow. Modern technologies will become more and more important in the future. They will reshape not only banking, but the entire financial sector. Because the basic idea of Fintech also includes making financial activities more social and customer-oriented through communities and networks. The idea is: Together we can simply achieve more.