What is FinTech?

FinTech, short for financial technology, seems to be the buzzword heard from the Silicon Valley to Wall Street to London and beyond. I’m sure all of you could take a guess based on the name, but really, there are so many applications of FinTech that extend beyond imagination. After doing some research, something I found very interesting about FinTech is its capability to create social justice and democratize opportunity through entrepreneurship.


In the 21st century, the term FinTech has evolved to include any technological innovation in the financial services sector, spanning from retail banking to cryptocurrencies and more. In this way, FinTech is an all-encompassing term that describes an immense variety of technological breakthroughs into both commercial and personal finance.


The emergence of FinTech has served as a massive disruption to the financial services sector, causing previously reputable financial institutions to rethink their approach to the industry. Therefore, the disruptive innovation of FinTech has altered the way markets operate. Traditional trading, banking, financial advice and products have had to transition away from their previous dependency on branches, salesmen and desktops, and instead move toward a more democratic, mobile, and fast-moving financial environment. For example, the app Robinhood charges no fees for trades, and grants anybody the ability to invest in cryptocurrencies, ETFs, stocks, options, and more using a secure platform utilized and trusted by millions.



Sure, FinTech is on the rise, but who uses it anyway?

According to EY’s Fintech Adoption Index, about one-third of consumers worldwide are using two or more FinTech services, with 84 percent of customers saying they are aware of FinTech—a twenty-two percent increase from the previous year.

Within these users, there are four broad categories:

1) B2B for banks

2) Business clients

3) B2C for small businesses

4) Consumer FinTech

Following these trends in mobile banking, increased information, and more accurate analytics, there are ample opportunities for all four groups to interact in unprecedented ways.



Last year alone, FinTech received $17.4 billion in investment. North America produces most of the FinTech startups, with Asia following closely behind. FinTech companies utilize technology to create more comprehensible platforms such as payment apps (hello Venmo a.k.a every college student’s best friend) to more complex software applications such as artificial intelligence and big data. Some of the most commonly used areas of FinTech innovation include:

  • Cryptocurrency and digital cash
  • Blockchain technology
  • Smart contracts (which often utilize blockchain) to automatically execute contracts between buyers and sellers
  • Open banking (which integrates third-party institutions and bank data to build applications that create a connected network of financial institutions… An example is the money management tool Mint)
  • Insurtechs (which aim to utilize technology to simplify and streamline the insurance industry)
  • Regtech (which seeks to help financial service firms adhere to industry compliance rules)
  • Robo-advisors (which use algorithms to automate investment advice and increase accessibility while reducing costs… an example is Betterment)
  • Unbanked/underbanked services (which seek to serve disadvantaged/low-income demographics who are do not traditionally have access to typical financial services companies)


Various start-ups have been involved in the process of creating these new technologies, but many of the world’s top firms including HSBC, BlackRock  and Credit Suisse have been developing their own FinTech practices to enhance and democratize financial operations.


Therefore, new technologies can leverage FinTech to take the guesswork, routine, and complication out of financial decisions. As previously mentioned, this can transcend financial boundaries and delve into uses such as machine learning, artificial intelligence, predictive analytics and data-driven marketing.

Robert Dunn, the global executive director of microfinancing company Opportunity, a Chicago-based nonprofit, claims that the path out of extreme poverty for many people around the world lies in entrepreneurship. Therefore, by leveraging FinTech, he believes he can provide access to microloans and financial expertise to the poor in order to help them run their small businesses. In an interview with the Wharton School of Business, he explains that the concept of fintech is very exciting, particularly with respect to credit scoring and figuring out what products are needed by different people.” Although it is still in its early stages, he believes that he can use “credit scoring algorithms based on social media footprints for lending to small and medium-size businesses” and allow them to prosper, despite financial disadvantage that other typical investors would perceive.

By learning more about FinTech and its landscape, I was blown away by the far-reaching capabilities and opportunity to do good for the world. Often in the world of technology and finance, it’s a dog-eat-dog world with a somewhat cutthroat reputation. However, I was so relieved to read that these innovations can in fact be used for a more equal and efficient financial system.


As investment and developments are bound to grow in this sector, I am really excited to see where FinTech can take us. Specifically, I am super interested in the impact it can have on underprivileged populations. 

Thanks for reading!

6 thoughts on “FinTech

  1. Thanks for the information about FinTech! I loved reading this snapshot of the emergence of this industry, since it is something that I am interested in pursuing. I find it so interesting that this disruptive tech is causing established companies like PNC and BlackRock to incorporate innovative labs to further their research in FinTech. I would love to hear more about how technology like algo-trading is changing jobs and careers as well.


  2. Like you said, FinTech is definitely a buzzword that I have heard plenty of. However, you bringing up why Robinhood is disruptive to typical banks made me think of it in a new light. Companies like Robinhood are using FinTech to change how people will buy and sell in the future. Also, using FinTech for social justice is something I have never really thought of before, and makes me excited about its capabilities as companies advance.


  3. Great post! This will be an awesome reference guide for the trip, so try tagging it under “fintech” so everyone can find it later!

    It will be interesting to see who the winners will be in this sector- startups, traditional institutions with internal development, or traditional institutions that buy startups (like Chase and WePay). Probably a combination of all 3.


  4. Absolutely loved reading more about FinTech, this was a really comprehensive explanation. I’m looking forward to following cryptocurrencies over the next few years –– it’s a shame that confidence plummeted despite how quickly the technology behind it is developing. I also can’t wait to see the impact that companies like Opportunity or Acumen have on our world!


  5. Great post Katie! I am so glad that you wrote about FinTech as it is a topic that I have been hoping to gain more clarity on. I am especially interested in your point about how FinTech creates social justice. I never saw how that could be the case until I read your summary.


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