From mobile payments to remote check deposit, it’s safe to say that the power of Fintech has affected our everyday lives. In fact, Ernst & Young’s latest Global FinTech Adoption Index shows 64 percent of the globe was using fintech applications in 2019, up from a meager 16 percent only four years prior. It also shows that three out of four consumers had become users of money transfer and payment solutions.
That’s a pretty big jump! But even with its growing popularity, the idea of “fintech” can still sound a little vague. If you’d like to understand what fintech is besides a buzzword, read on below.
What is fintech?
Literally, “fintech” is a mashup of the words “financial” and “technology.” Any kind of technology that was developed for financial institutions, whether it helps with payments, card usage, money transfers can fall under fintech. Here’s another way to think about it: If the technology is used to enhance, simplify, digitize or change up traditional financial services, you can safely consider it “fintech.” On a slightly more technical level, fintech refers to desktop or mobile software, algorithms and applications. In some cases, it includes hardware, such as internet-connected piggy banks. As you can see, it’s a lot.
Why it matters
The best way to think about fintech is to remember that it exists to make everyday financial tasks easier, such as paying bills or depositing checks, or even applying for a loan. It also helps broker more technically complex concepts, such as peer-to-peer lending and crypto exchanges. That Venmo payment you sent your mom to help cover your sister’s birthday dinner? That used fintech. The rideshare driver you paid in Bitcoin last week? Boom -- fintech. While civilization could certainly carry on without fintech, it enables people and businesses to move faster, communicate better and generally make life (from a financial perspective at least) easier.
What the future holds
With all of that said, the possibilities that fintech provides the financial industry (and the account holders and consumers they serve) are endless. And while you likely won’t have to become an expert in fintech and all of the different technologies that fall under its umbrella any time soon, we hope you now have a better idea of how meaningful the everyday tools you use to conduct financial business are.
If your financial institution is looking to make a splash in the fintech marketing scene, Larky can help. We deliver customized push notification campaigns directly through the mobile banking app so that account holders receive relevant information when and where they need it most. To learn more, just drop us a note or schedule a quick demo to see for yourself.