FinTech stands for Financial Technology and refers to technology, systems, and companies that are in a financial sphere.
FinTech can be physical, or it can be online. For example, an app counts as FinTech as much as a physical piece of technology used to send and receive contactless payments. However, financial technology can also refer to things like cryptocurrency, a totally online set of systems. An interface is still necessary, but cryptocurrency shows that FinTech can denote a totally online system.
So, what has FinTech done to change how we handle our earnings?
You will already have noticed the changes financial technology has made in your life. Contactless payments became vastly more popular in 2017, and that’s thanks to innovation in FinTech.
With the use of NFC (near field communication), it became possible to encrypt payments from phones and debit cards so that user data could remain anonymous. With this change, how we handle currency took another step towards being totally online.
As well as this, apps such as PayPal have also helped fuel a FinTech revolution. In fact, FinTech has totally changed modern banking. Now it’s possible to split a bill, order a service, or send money to someone with a few simple touches. Even a fingerprint or facial recognition software can help you pay for goods and services, or help you send money to a friend or family member.
FinTech has sped up how we pay for things, and how we handle those payments.
Gig Economy and Crowdfunding
Gig economy is part of the 21st century. It’s easier now than it has ever been to order a service online from a range of talented individuals, whether that be an Uber to the airport or a new logo designer on Fiverr.
Gig economy is helping drive wave after wave of financial technology and banking innovation. As it’s so simple to order these services, financial technology companies and developers have to stay ahead and keep sole traders in mind to maintain a streamlined and effective service. For example, if a FinTech company wishes to compete with PayPal, they can’t do so without keeping the gig economy in mind as PayPal is helping keep transactions simple.
Crowdfunding websites fall in between these two as they can be categorised as FinTech. Crowdfunding sites act as a middle-man so that a community can help fund something they’re passionate about, or help realise an innovation. This helps a project come to life, as well as promising a return on investment for an investor.
FinTech and PropTech
Similar to with the gig economy and crowdfunding, FinTech is also helping to fuel a boom in PropTech.
The trend is clear, financial technology helps with transactional processes and makes them more accessible. With crowdfunding, anyone can be an investor, and it’s no different with PropTech.
FinTech allows simpler transactions so that it’s possible for people to own multiple properties and leverage their assets against their mortgage by renting them out. This wouldn’t be possible without waves of innovation in FinTech, IoT, PropTech, and banking as a whole.
Therefore, financial technology is giving everyone the ability to earn more and innovate. FinTech isn’t alone in this, though. The progress within PropTech, gig economy, crowdfunding, online payments, and the new ways we can make money and buy and sell services is all moving forwards in tandem. This forward momentum will continue and allow us to spend smarter, and simpler.