Fintech: what is and what types of companies exist

Fintech is here to stay. They currently represent about 5% of the banking service and their development is being very rapid. Both banks and also new companies are creating fintech activities by giving innovation, a far better customer experience.

The term fintech comes from the English words Finance and also Technology, and describes all those activities that include the use of advancement and also technical advancements for the layout, supply and also arrangement of monetary products and services.

Types of fintech

Administration and recommendations sector

  • Automated recommendations and also administration: these are platforms from which recommendations is offered or clients’ resources is managed making use of automated treatments, that include intricate algorithms or expert system. These jobs range from accomplishing the customer account test to making investment choices and also implementing them immediately. An example of this kind of solution is the so-called robo advisors or quant experts.
  • Social trading: these are platforms where investors get in touch with each other or professional investors. There are different business versions that range from trading financial details as well as point of views to automatically imitating the investment methods of 3rd parties.

Personal financing

They provide the customer effective administration of individual financial resources and also the possibility of comparing different monetary items. They give details on the status and also motions of their accounts as well as provide financial products tailored to the individual’s needs.

Alternative funding

It covers the following types:

  • Fast loans online: financings to individuals as well as companies, of percentages, approved in a rapid way with platforms.
  • Participatory funding: this includes putting together, with a platform, designers that need funding for their jobs with a number of individual financiers. This kind of funding, likewise referred to as crowdfunding, can be with fundings (crowd lending) or via the concern of particular financial tools (group equity) such as shares, stockholdings or bonds.

Settlement services

Repayment services using mobile or digital devices.

Big Data

This group includes all those entities that generate added value with the evaluation of a huge volume of information, having the ability to use artificial intelligence techniques.

Online consumer recognition

These are business that are dedicated to providing remote identification systems for individuals utilizing brand-new technologies, such as biometrics. They change the traditional password to access the systems by brand-new methods such as face recognition or fingerprinting.

Cryptoactives

This is the depiction of possessions, tape-recorded in electronic format, which are sustained by cryptography and also distributed enrollment modern technologies, such as blockchain. Among these are crypto-currencies, which are made use of as a way of repayment in particular transactions.

There are additionally those that do solutions in other companies such as insurtech (insurance policy) or proptech (property).

According to a recent research by Finnovating, a global platform for open innovation method, in 2019 there were 481 financial investment rounds in the Finntech world in Europe, for a complete value of 8.291 billion euros. The bulk of the financial investments, 33.5%, were made by Fintech committed to payment and finance solutions, 7.7% by the neo-banks as well as 7.4% by savings and also investment devices.