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Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services.
The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions.
However, it has since grown outside the business sector with an increased focus upon consumer services.
What Purpose Do Fintechs Serve?
The main purpose of fintechs would be to supply a technological service that not only simplifies but also aids consumers, business operators, and networks.
This is done by optimizing business processes and financial operations through the implementation of specialized software, algorithms, and automated computing processes.
Transitioning from the roots of the financial sector, fintech providers can be found through a multitude of industries such as retail banking, education, cryptocurrencies, insurance, nonprofit, and more.
While fintechs cover a vast array of business sectors, it can be broken down into four classifications which are as followed:
Business-to-business for banks, Business-to-business for banking business clients, business-to-consumers for small businesses, and consumers.
More recently, fintechs presence has become increasingly apparent within the trading sector, primarily for cryptocurrencies and blockchain technology.
The creation and use of Bitcoin can also be contributed to innovations brought upon by fintechs while smart contracts through blockchain technology have simplified and automated contracts between buyers and sellers.
As a whole, fintechs applications are growing more diverse with a consumer-centric focus while its applications continue to innovate the trading and cryptocurrency sectors through automated technologies and business practices.