There’s been a lot of talk about fintech lately. We talk about the billions of dollars being invested in fintech; the wave of unicorns and start-ups in this space; the challenge they bring to banks and incumbents; the way in which they are reaching new spaces and places; but what is fintech? It is no longer this big bucket of finance and technology. In fact, saying ‘fintech’ is like saying ‘retailer.’ But what exactly are they retailing and, in the fintech sense, what areas of finance are these companies automating?
This question gets interesting as we now have a market that is spreading its wings into lots of different areas. It is no longer one big bucket, but many.
There is RegTech for Regulatory Technologies; WealthTech for Wealth Management Technologies; InsurTech for Insurance Technologies; and so on. On top of that, fintech has gained subcategories like Lending, Analytics, Digital Identity, Cybersecurity, SME and Student Financing, Payments, Roboadvice, Blockchain Distributed Ledgers, Neobanking, and more. Then there are also some generic technologies around Cloud, the Internet of Things, Artificial Intelligence, Machine Learning, Biometrics and others that are also creating fintech themes and impacts. So what is the real state of play and what are the impacts?
The real state of play is a three-stream market of firms using new technologies to offer new services in banking and insurance.
The first stream creates a whole new financial structure, with crowdfunding as a great example. Crowdfunding allows start-up firms to get funding on…