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What You Need To Know About FinTech

What You Need To Know About FinTech

Posted by PanamericanWorld on April 19, 2017

As a business owner, you may have seen the word “fintech” all over the internet, being used by an accountant, a peer or even your bank manager - maybe you didn’t want to ask “what is it?”, so here is a very simple guide to fintech:

Fintech is essentially the forging of two words – financial & technologies – and that is exactly what it is! It is technology used by a financial services provider (often a lender) to improve their business in some way. We have now seen the advent of “fintech businesses” which is a financial services business that is centred around the technology.

These businesses are generally more recent than your high street banks and use technology to try to disrupt the industry, providing customers with an alternative rather than waiting for a bank manager to consider an application for finance for several weeks. They often use the technology to help in decision making through algorithms.

What does it mean for you?

Well, in a market that has been monopolised by a small number of banks for such a long time, the vast influx of these lenders into the market creates competition which can only be a good thing!

More lenders competing for your business can only drive down price and drive up service and flexibility.

The biggest difference with a fintech lender is often speed of delivery. If historically you had an opportunity (say the potential to purchase stock at a vastly discounted price if you bought it in 48hrs) then you needed the cash in bank or you would have to let the opportunity go. Now, however, you can access funding from a lender sometimes in as little as 24hrs, you have the ability to be more entrepreneurial and borrow the money quickly to take advantage of the opportunity.

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