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Fintech: A world without physical bank branches

Have you imagined a world without physical bank branches, in which all the services could be solved at any time of the day through your smartphone? This reality is getting closer every day thanks to the new online financial products of traditional banking … but also because of the development of a financial industry born in the digital era itself. The concept of fintech, as we will see next, has a lot to do with this last current.

Imagine a scenario in which you could increase and reduce the limit of your credit card without talking to anyone, with just one click on an application. That world already exists and it’s called fintech. But do you really know what a FinTech is? As you could have imagined, the concept derives from the words Fin (finance) and Tech (technology), so we can define this term as a new financial industry born in the framework of online technology. New entities and companies emerged in the network to operate exclusively in this environment, far from the traditional formats.

Fintechs are the fruits of the fourth industrial revolution, where automation and data exchange are the key. In the productive sector, smart factories are already starting to produce personalized items on a large scale, without the need for stocks. In the financial market, this revolution is also changing old concepts and transforming the sector.

Fintech: what it is and how it works

Many people already use the services of these companies, but without knowing essentially what fintech means. Fintechs are companies that redeem the financial services area with processes based entirely on technology. But these innovative services are not limited to digital banks. Despite being under the same name, these companies can offer different products and services to each other.

There are several types of fintech that cover different financial services. These are the best known:

Payment Fintechs

Payment fintech arise to facilitate our operations when we talk about buying and selling. They can offer, for example, news on credit cards. In that category, Nubank enters, a Brazilian company that emerged as an entity specializing in credit cards without fees or annuity.

Fintechs of credit or loan

The idea of credit or loan fintechs is none other than offering loans of different types at lower interest rates than traditional banks. They perform credit analysis from technological solutions to improve the dynamics of financial services.

Bitcoins Fintechs

With the Bitcoin fever, fintechs have emerged to facilitate the transactions of investors with this virtual currency.

Fintechs of financial control

For those who need to keep finances in order, the fintechs of financial control came. They help you control expenses through your mobile, allowing the creation of categories of expenses and definition of goals.

Your goal is to offer more ease when it comes to making your money grow.

What is the difference between fintech and startup?

Startups are innovative business models, strongly supported by technology, with low cost, immersed in a dynamic of scalable growth and usually reach a traditional segment like a hurricane. In this way, it is possible to reinvent services, de-bureaucratize processes and make products cheaper for consumers. We can say, therefore, that fintech is a kind of evolution of startups in the financial sector.

Another common doubt is about the relationship between fintechs and banks. Although many banks really feel threatened by the innovations promoted by the fintechs, there are innumerable cases of financial institutions that come allying themselves to the fintechs to offer a new product / service in the market.

What are the advantages of a Fintech?

By its very definition, fintechs work to make people’s lives easier, enabling them to solve problems and use services quickly and safely. This innovative stance explains why these companies grew more than 350% in the world between August 2015 and May 2017.

While a traditional bank requires the presence of the client when opening an account, with the fintechs the process is much more practical. Today, it is possible to open an investment account without having to leave the house, just by filling out the main data.

Photo by Markus Spiske on Unsplash

Also published on Medium.

Published inFintech

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