Fintech Meaning - A Complete Guide

Fintech meaning- Short for Financial Technology, ‘Fintech’ is an overarching term for a number of interdependent technologies that deal with the delivery of modern-day financial services. The basic fintech definition is the study of technologies that help individuals and institutions exchange financial services with much more speed and efficacy than the traditional methods.

Compare the act of physically going to the bank to transfer money to being able to do so straight from your phone. But it isn’t only banking service technologies that make up fintech. Our easy access to other services and markets, like stocks, forex, crypto trading, etc. is a result of fintech, meaning that without these technologies, we won’t have the luxury of checking our portfolio performance or pulling up real-time information for investment research right at our fingertips.

Fintech is responsible for ushering in greater financial literacy and its study has become one of the most lucrative courses to pursue. In this article, we go through the fintech definition in detail, what place it has in our lives and the courses and careers that one can pursue in this relatively new but fast-emerging field.

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The Evolution of Fintech

Even though the portmanteau of the words ‘Financial’ and ‘Technology’, aka FinTech, entered the dictionaries as late as 2018, the field of financial technology has always been a part of our society. There was a time when ATMs were at the forefront of fintech, meaning they were amongst the most advanced technology in the field of finance. They made bank tellers obsolete and cut down the time and costs of the transaction. And now, thanks to further advances in the field, the financial technology meaning is further broadened to include a variety of technologies and services.

Nowadays, people check their bank balance from their phones, recharge metro cards through UPI, pay their bills through app-based credit card services, research and invest via trading platforms, allow AI-based services to generate their CIBIL score, pay for rides and food, all without ever coming in contact with physical cash.

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The value of the fintech industry has perhaps best materialized during the COVID-19 pandemic. Even when brick-and-mortar banks and financial institutions are closed, their services are still available digitally, allowing one to transact or avail of other financial services on the fly.

The number of such digital transactions, be it for crypto, insurance claims, online payments, etc. is estimated to only go up from here as fintech integrates itself deeper into our lives. This will further evolve our current fintech definition and what it means to have such services at our disposal.

Applications of Fintech

To better understand the fintech meaning, let us look at its various applications and how it touches our lives in a profound way.

Blockchain, cryptocurrencies and new markets

Fintech has given birth to a host of cryptocurrencies like Bitcoin, Ethereum, Dogecoin, etc. which are based on the underlying blockchain technology. Because of the level of encryption possible on blockchain technology, cryptocurrency transactions are some of the most secure transactions possible today. This is leading to widespread acceptance of these digital currencies. Various new markets have emerged as a consequence of this as well, many of which have non-traditional modes of operation that are highly beneficial to hitherto under-served demographics. The NFT (non-fungible token) markets are a product of the crypto phenomenon. These are amongst the fastest-growing markets today as they do not require any intermediary agents like record labels and art galleries to service the artists’ works, effectively getting them better deals for the sale of their craft. Transactions are made and recorded as non-fungible tokens, which is based on blockchain technology, all without any paperwork whatsoever.

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Insurance

The application of fintech is felt the most in the insurance industry. Disrupting the traditional process of insurance, insurtech (as it’s often called) has infiltrated every aspect of the banking and insurance industry. Nowadays, everything from car and life insurance to data protection is handled digitally, thanks to a slew of insurtech startup companies that are redefining how the customer interacts with insurance services. Advancements in AI and algorithm-driven data is fast-tracking insurance products for individuals, while companies are creating more flexible products that accommodate the lifestyles of customers, as well as the stage of life they’re at.

UPI, mobile payments, and online banking

In the Indian economy, the Unified Payments Interface (UPI) and mobile banking have grown at a staggering pace. If you’ve ever used digital payment systems, such as Paytm, Google Pay, PhonePe, etc. then you know the convenience that it affords. UPI relies on the Aadhar, a biometric identification system unique to India, and is specifically designed to speed up seamless transactions while minimizing transaction costs.

Banks and digital payment companies have been pushing customers to adopt such forms of electronic payment systems to ensure that even those living in rural areas can get access to banking services without having to actually visit a physical bank branch. Similar systems are found in other countries as well. For instance, Europe has its International Banking Account Number (IBAN) system that lets banks identify accounts from beyond their national borders.

Crowdfunding platforms

To understand the true impact of the fintech revolution, one can never miss out on the inception of online crowdfunding platforms. These allow individuals to get people from all over the globe to send or receive money for their projects, adding a great dimension to the fintech meaning on a personal level. These include the likes of Patreon, GoFundMe, Indiegogo, etc.

Fintech courses

Financial technology courses are usually offered at the postgraduate level. Because it takes a fair bit of understanding of the world of finance to appreciate financial technology, meaning it gives background to its understanding, most universities that offer fintech courses will require students to have a graduate degree in finance. However, there is a BBA Fintech course that students can pursue after class 12 from Sushant University, Gurgaon and GITAM School of International Business, Visakhapatnam. There are various fintech certification courses as well that acquaint students with the world of finance and help them better understand fintech meaning.

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Fintech careers and top recruiters

There are a variety of jobs in the field of financial technology, due in no small part to the greater demand for fintech services today. Here are some of the popular career paths that one can choose from:

• Blockchain Developer

• Apps Developer

• Financial Analyst

• Cybersecurity Analyst

• Quantitative Analyst

• Data Analyst

• Business Development Manager

Here are some of the top fintech recruiters:

• Arete Ventures

• Deloitte

• HDFC Ltd.

• Wipro

• Bank of America

• Klynveld Peat Marwick and Geordeler

• Cians Analytics

• Mazars

To understand the fintech meaning is to know the current state of finance and how people use existing technologies to improve the speed and efficacy of the delivery of financial services. Knowing the fintech technology meaning doesn’t just improve financial literacy but also makes life easier when it comes to availing of financial services. We hope you now have a better understanding of the fintech definition and how deeply it is integrated into our lives.

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