What Is Fintech? Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: jiang suying/Getty Images October 19, 2022 Sarah Sharkey is a contributing writer for Bankrate. Sarah writes about a range of subjects, including banking, savings tips, homebuying, homeownership and personal finance. Karen Bennett is a consumer banking reporter at Bankrate. She uses her finance writing background to help readers learn more about savings and checking accounts, CDs, and other financial matters. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Here is a list of our . Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. The term fintech might conjure futuristic ideas of the merging of traditional finances with technology. But chances are fintech already holds a prominent place in your daily life. If you value the convenience of quick money transfers among friends and family, then you are already enjoying one aspect of fintech. An includes any mobile payments you’ve made via , Apple Pay, Zelle or similar payment platforms. But the term fintech applies to all kinds of products and services. “The scope of fintech is massive now — thanks to technology,” says Bill Clerico, founder and managing partner of Convective Capital. Clerico had co-founded online payment service provider WePay, which is now a JP Morgan Chase-owned company. “The rise of fintechs in the last decade has caught the attention of traditional financial institutions as an opportunity to enhance at a faster pace and to improve the overall customer experience.” As you’ll find out below, the fintech umbrella includes many exciting and unique advancements across different types of financial services. What is fintech
The name “fintech” combines the two key components: finance and technology. While the term has become more popular recently, it’s been around since the 1990s. It came about with the launch of the Financial Services Technology Consortium in 1993 by Citicorp, which was a group of financial experts aiming to find new ways to use technology in finances. The big idea behind fintech is to use technology to make traditional financial sectors safer, faster and more efficient. Fintech can be used to describe all sorts of companies, products and services. “Fintech refers to any business that uses technology to enhance or automate financial services, transactions and processes,” says Matthew Dailly, the managing director at Tiger Financial in London. “It can be used in a wide range of applications and is probably most notable in , but is equally as important and as much used in industries such as cryptocurrency and insurance.” Fintech has far-reaching effects that range from anti-money laundering software that protects banks from fraud to the emergence of that aim to disrupt traditional banking models. With the help of fintech, the way that we interact with money and conduct financial business is changing every day. Where is fintech used in 2022
Payments
represent one of the most tangible developments from fintech. They include mobile wallets, contactless payment platforms and P2P payment apps. It is fairly likely you’ve used P2P payment options like Venmo or Zelle, and they were made even more popular due to the COVID-19 pandemic. “Fintechs are able to offer consumers more seamless payment options; allowing them to pay wherever and however they want,” Convective Capital’s Clerico says. “Touch-free, contactless payments are more in demand than ever due to the global pandemic, creating an opportunity for fintechs. There is an even greater need in the point-of-sale space to have contactless payment options and digital wallets.” Lending
Fintechs that work in lending can help both consumers and businesses access funding. They can also help lenders determine whom to approve for loans. Essentially, this allows for customers to enjoy a smoother experience: You’ll be able to apply for a new loan and find out if you are approved quickly. With a drive toward a better customer experience, you can expect features that streamline the loan application process even more in the future, with such recent developments as contactless closings on mortgages. Insurance
With a changing insurance landscape (think ), fintech is making lasting changes to the way insurance companies interact with the consumer. If you’ve sought out an insurance quote recently, you’ll notice that the process has become more efficient than in the past. Instead of being required to work with an insurance agent in person, you can potentially get a quote within minutes. Plus, you’ll likely be able to finish the process completely online. Many of these changes are due to the innovative technology that fintech brings to the table, such as supercharged data analytics, machine learning and to better track and predict the needs of customers. Checking accounts
A checking account is one financial product that most consumers need to manage their money. In the past, traditional financial institutions have been the only option for banking. But fintechs are transforming traditional bank products. If you don’t want the fee-heavy accounts of traditional banks, then you have alternative options with challenger banks or neobanks. Current, Chime and Aspiration are examples of fintech companies that partner with banks to offer digital-only checking accounts. These accounts use technology to help you monitor your bills and alert you when you are in danger of an overdraft. They often come with no overdraft fees, monthly fees or ATM fees. Plus, these digital accounts can learn from your spending habits and provide suggestions to improve your financial situation. Personal finances
Many fintechs are making it easier for consumers to manage various aspects of their personal finances, from automating savings to tracking spending and budgeting. If you are new to budgeting, it can get confusing quickly. That’s when a fintech-powered can come in handy. You’ll be able to set your financial goals on autopilot with the help of these kind apps from fintech firms like Digit and Qapital. “Fintech is also helping people develop better financial habits, make smarter choices and automate their savings, investments and bills,” says Miron Lulic, founder of SuperMoney. “This is making younger generations far more financially savvy than their parents.” The tools and information to create a solid financial foundation are becoming widely available with the help of fintech. Cryptocurrency
, or a kind of digital currency that is intended to act as a medium of exchange, is a direct result of fintech innovation. A major appeal of cryptocurrency is that it has the potential to hold value without the interference of a central bank or government, though the Biden administration is , which may lead to some regulation. You’ve likely heard of at least one type of cryptocurrency: . But it is not the only digital currency available. Some of the others include Ethereum, Litecoin and Ripple. Jon Squires, executive chairman of Scandinavian fintech Skilling, says cryptocurrency started to seem more like a real way to store value when people began to realize that you could buy part of a large property project or get involved in an exchange-traded fund through a crypto coin or token. “The accessory services, from tax to wallet handling to security, have started to evolve very quickly as part of general demand,” Squires says. “And that’s how crypto really became a reality, with the development of fintech and a greater acceptance by the mainstream institutions, as we start to imagine how tomorrow’s finance world is going to look.” With that said, cryptocurrencies have somewhat fallen out of favor in the past year, as they have decreased in value. Bitcoin and Ethereum have both plummeted over 70 percent since their highs in 2021, and a recent found that those who reported they are “very comfortable” or “somewhat comfortable” with cryptocurrencies fell by more than 39 percent since 2021. Bottom line
The continued development of fintech is something that is not slowing down anytime soon. The big goal will remain the same: Reimagine traditional banking services and products with the customer in mind. With fintech proving to be a quickly growing market, it can also serve as a great who want to be at the forefront of financial innovation. — Bankrate’s René Bennett also contributed to this story. SHARE: Sarah Sharkey is a contributing writer for Bankrate. Sarah writes about a range of subjects, including banking, savings tips, homebuying, homeownership and personal finance. Karen Bennett is a consumer banking reporter at Bankrate. She uses her finance writing background to help readers learn more about savings and checking accounts, CDs, and other financial matters. Related Articles