Fintech: But what is it?

Combining the terms “finance” and “technology”, FinTech is an innovative start-up that uses technology to rethink financial and banking services. Following the economic crisis of 2008, many bankers and traders left the major financial centers of the planet and embarked on entrepreneurial adventures to rethink the model of finance through technological innovation. With the aim of making finance simpler and more accessible by offering better and cheaper services. In ten years, the banking sector has experienced more changes than in 200 years. FinTech is developing in all areas, from savings management to loans for individuals, through corporate financing or online payment.
After disrupting the music, press or tourism sectors, new technologies seem to be creating a new revolution, this time in the banking and financial sector. An explanation by Franck Peltier.

The different classes of FinTech

Crowdfunding

The first of the family and the most publicized, is the “crowdfunding” via a dedicated platform, individuals can finance business projects or artistic creation. This financing may take the form of a donation (with or without a material counterpart), a participation in the equity of the company or an SME loan (crowdfunding). This is the case of Bolden, an alternative credit platform that allows you to pay less than 3%.

P2P lending

Crowdlending is also the “P2P lending” (loans from individuals to individuals). This is the case of the site Prosper.com, created in 2005 in California, which allows individuals to apply for consumer loans or lend money without going through the traditional channel of banks.

Mobile applications and platforms

Consists of mobile applications and platforms that allow you to manage your banking activities, be it the control of your expenses or your investment choices. For example, eToro is the first social trading network that allows users to track and copy the investments of other network members.

Virtual currencies

The third family concerns virtual currencies, the best known of which is the Bitcoins system, especially in the “Deep Web”. But monetary exchange systems have also developed on the social network Facebook, the Facebook Credits, and on the virtual game Second Life, the Linden Dollars.

Electronic Payment via Smartphone

Finally, the last category concerns electronic payment via smartphone and on the Internet, at merchants or on e-commerce platforms. This is particularly the case of a system such as PayPal, the most famous, which allows to pay for purchases or receive money securely, without having to transmit its bank details. The Square service, available in the United States, Japan and Canada, allows him to pay for purchases directly with his smartphone in stores.
This list is not exhaustive and the number of FinTech continues to grow and develop in more and more areas.

FinTech is a growing industry

All traditional sectors have seen their business models turned upside down by the Internet revolution: after Amazon for distribution, Blablacar for transport, Uber for taxis or Airbnb for rentals, it is the turn of the banking sector to be challenged by new technologies.

Fintech specialist