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Although the existence of FinTech isn’t new, the term and how it can be applied to businesses has become more well-known over the past few years. However, if you’re not sure what FinTech is, and what advantages it may have for your career and business aspirations, then this handy FAQ should help shed some light on this vital industry…
What is FinTech?
FinTech is a portmanteau: financial technology. That’s all that FinTech is at its core; technology that allows for financial transactions.
What makes FinTech different?
FinTech has come to be understood as relating to those who work in fields that seek to change the way the financial system currently works. FinTech is pioneering; it focuses on finding new solutions, rather than just refining the existing programs and platforms that allow for financial transactions and data use. These solutions tend to involve the use of the internet as a key component of their strategy.
For example, cryptocurrencies are one of the most well-known areas of FinTech. Cryptocurrencies seek to decentralize the banking system so that payments can be made peer-to-peer without a financial institution (such as a bank) having to be involved in the transaction itself.
FinTech is therefore seen as inherently disruptive to existing technologies and processes using by the financial institutions of old. It seeks to find new ways to deal with financial transactions, loans, fundraising, mobile payments, and so on and so forth.
What are other examples of FinTech?
- Blockchain technology is considered to be FinTech. While blockchains might be most associated with cryptocurrency, the technology actually has a huge number of potential applications, which those involved in FinTech seek to make use of.
- Crowdsourcing is also FinTech, as it circumnavigates the old-fashioned approach to raising capital (i.e. contacting a central bank), and instead sources capital from the public directly.
- PayPal is a good, well-known, and widely accepted example of FinTech.
Where is FinTech popular?
FinTech has become somewhat synonymous with Silicon Valley, but its reach is far wider. China has been a pioneer in the FinTech industry; Hong Kong has adopted FinTech so wholeheartedly they now have the need for event venues for those that work in the industry, and even lesser-known countries such as Luxembourg have been involved in the adoption of FinTech into the mainstream from the start.
It is also worth noting that FinTech can technically be produced and worked on from anywhere in the world, so if you’re interested in working in FinTech, remote working is a definite possibility.
How big is the FinTech industry?
Frankly, it’s huge. The chart shown here shows the seemingly exponential growth of FinTech investment, and there’s no sign of the industry slowing down anytime soon. If you’re looking for a business startup idea, then FinTech is a booming sector that you will definitely want to consider.
In conclusion, FinTech is shaping the way that money is used throughout society, and there’s no sign of its hold changing anytime soon. If you’re looking to future-proof your career or business aspirations, then all the signs suggest that FinTech could be the perfect choice to allow you to do just that.
Image Source: Monito