Fintech (Financial Technology) is a new financial industry
that arises, as has already happened in other economic areas, from applying
technology to the financial sector techwadia. The digital transformation that has been
applied in other sectors for years, breaks into the financial market in order
to create new applications, products and services that customers can access
through the internet.
Those known as Fintech companies are, for the most part,
startups that develop technological innovations adapted to the needs of a
consumer who uses technology as a fundamental part of their day-to-day life.
Let us know more details about this type of company:
Fintech companies
Although it is true that traditional banks have implemented
technological tools that allow their clients to operate more autonomously and
remotely (through the Internet), they are still, in most cases, large companies
whose internal structure does not allow them respond to the new needs of
consumers in an agile way. This reality has allowed the growth of companies
within the entrepreneurial ecosystem whose business model represents an
evolution in the financial system.
For fintech companies , the client and their needs are at
the center of their business development, as well as the creation of products
and services aimed at meeting their needs and priorities. In this sense, the
detection of these needs through direct contact with the client, research and
Big Data analytics, becomes the main source of information for making strategic
decisions related to the financial business itself.
The automation of operations and the absence of
intermediaries characterize these business models together with the absence of
physical facilities available to the customer and the use of the
"cloud" as the main technological infrastructure.
Payments, transactions, currency exchanges, online banking,
raw material management, collective financing, etc., are some of the services
in which fintech companies work. Their combinations are unlimited and, due to
the importance that all types of economic transactions have for the client, a
market niche with great potential for innovation for all those entrepreneurs
who wish to enter the financial sector.
The development of the Fintech sector
According to Aaron Silva, in his publication "The
Evolution of the Fintech Sector, Business Models, Regulation and
Challenges" (2018), the development of the Fintech sector has been
influenced by a series of social and business factors in addition to purely
technological ones. Now, it is technology that has allowed the development of
the Fintech phenomenon.
In this way, the appearance of Fintech companies is located
in the mid-90s with examples such as the founding in 1998 of the Confinity
company that gave rise to the current PayPal. A business model that covered the
online payment needs of consumers, including a series of additional services
that give value to the user (one of the fundamental characteristics that we saw
in this type of company).
The development of digital technology and smartphones in
2008 represented a step forward in the growth of Fintech companies. Likewise,
according to some theorists, the onset of the financial crisis in September of
that same year had negative effects on financial systems that further led to
the proliferation of new companies based on financial technology as of 2009.
Finally, since 2014, the expansion in the use of mobile
telephony by users who do not have access to banking services both in developed
economies and, mainly, in emerging ones, has led to an increase in this type of
companies in the Fintech sector.
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