Fintech types: Fintech combines “Financial” and “Technology”. It aims to use the advancements in technology to make the finance sector more adaptable and effective. Read the post here to learn about Fintech, its workings, and its major classifications.
What is the Fintech Industry?
The Fintech Industry stands for the smart use of advanced technologies to make the finance sector effective and adaptable in this rapidly growing era. The fintech industries in India are expected to show a rapid expansion of up to $150-160 billion by 2025. It is also currently the second highest funded industry in the country. Some of the top-funded fintech startups in India are listed below.
- Paytm
- Policybazaar
- MobiKwik
- Capital Float
- Bank Bazaar
- Fino
- NeoGrowth
- Pine Labs
- InCred
For instance, you must have used an online payment search for Bitcoin, paying at a shop, P2P lending platforms, mobile banking, credit cards, insurance online, etc. All these are examples of the fintech industry. This industry has already been running for the last few years and is greatly improving the financial sector. Now, even the grocery stores are online.
Components of the Finance Industry
- Bank
- Payments
- NBFC
- Security Broking
- Distribution
- Wealth management
Components of the Technology
- Software
- Hardware
- Cloud Service
- Platform space
Both of these services together create and expand the fintech industry. Important technologies like cloud services, platform providers, software, and hardware have boosted the way finance services work. Now, we are adapting and accepting the technologies and making the most use of the trending technologies for the betterment of society.
The fintech industry has shown rapid expansion in the last five years with no pandemic effects. The future of these sectors is promising.
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Fintech Types: List of Fintech Types Companies
Fintech-type companies have shown a rapid surge in the last few years. Some of the most famous fintech companies that started and gained popularity in recent years are listed here.
- Paytm
- BlockChain
- Chime
- PayPal
- Revolut
- SoFi
- American Express
- Mastercard
- Intuit
- Nubank
- Policybazar
- MobiKwik
- Capital Float
- Bank Bazaar
- Fino
- NeoGrowth
- Pine Labs
- InCred
Fintech companies have affected and developed many fields, such as crowdfunding, fintech banks, online insurance, mobile payments, consumer banking, business loans, investment loans, etc. With the advent of new technologies, many sectors are improving their customer service support and services.
Also Read: What Is a Customer Relationship Manager? (Duties and Skills)
Fintech Types: Four Types of Fintech
The fintech industry focuses on using new technologies to improve their financial methods and services. The four major types of classification of Fintech industries are mentioned below.
- Artificial Intelligence: Artificial Intelligence is dominating every field. AI helps to automate the repetitive tasks to help make them effective. With the introduction of AI, it has been making an impact in most of the major sectors of the market.
Many top organizations are developing more uses of AI to make their services more effective. Fintech companies are quickly integrating the use of generative AI to enhance their working and follow the trend.
- Blockchain: A blockchain is a distributed, decentralised public, digitally distributed public ledger that is used to record transactions and track important assets in the business network. It can make some serious transformations in the fintech industries.
- Cloud Computing: Cloud computing services are being widely used nowadays and use cloud servers for storage rather than physical storage systems. It is making changes in the way we store our data and also improving the system. Most of the fintech companies are now using cloud computing services to operate their data and manage the storage.
- Big data: Big data is a huge collection of unprocessed data from many sources, including social media, transactions, sensors, and more. It is managed by numerous organizations to guarantee scalability and storage options for fast, real-time streaming data. Big data is a major element in working of fintech as a lot of data flow happens on a daily basis and big data analysis is a major requirement to make them future ready.
Fintech Types: Three Pillars of Fintech
The three main pillars of Fintech companies are given below:
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- Innovation: Innovation is also referred to as the driving force. The fintech industry depends on innovation, which helps industries make their services effective and productive. Artificial intelligence must be well integrated using cutting-edge technologies such as blockchain to make innovation possible.
- Accessibility: It is important to remove any obstacles or barriers to the planned innovation. The second pillar of fintech focuses on eliminating all kinds of barriers that come in the way of providing improved financial services. Under this, Fintech assures that all the advanced tools are available for users worldwide. The location and economic background must not be a barrier to providing the services.
- Security: Every organization needs to ensure that the integrity and personal data of their clients are safe and secure. It is one of the most important pillars of Fintech companies. They need to ensure that their integration with the new technologies and tools does not compromise security.
They must maintain the trust of their users. Using advanced encryption, authentications, and cybersecurity can help to maintain and ensure the security of their user’s data.
Also Read: What is the future of private banking in 2024?
Fintech Types: 6 Major Types of Fintech In 2024
The six major applications of fintech companies are given here in this article. Know some major areas where Fintech companies have influenced services.
1. Lending Services
The loan services have greatly improved in the past few years. Now, with the advancement of technologies, approving loans does not require standing in long lines. Now, with the development of fintech industries, you can easily get educational loans and property loans without the need for any collateral or requirements remotely through your smartphones.
There are many Fintech apps which provide easy loans such as Upstart, Lending Club, SoFi, Funding Circle, MoneyLion, etc.
2. Payments Services
The major effect of the expansion can be easily seen in the way we make payments. Now, you can easily pay via any application without having to leave the platform.
With the rise of mobile banking, even groceries are now available online, and most services accept online payments. You can easily receive payment for the services offered through these companies. Some of the top payment fintech companies are Paytm, Apple Pay, Alipay, Fund through, Stripe, etc.
3. Wealth Management
Now, most of the banking and financial services are available online on a digital platform. Now, the services are available online, which ensures smooth service and positive responses from the users.
As wealth management merged with the fintech industries, they ensured to provide better services to their users. Now, you can easily make transactions with mobile banking, online KYC available, loan services, chatbots, etc, which are transforming the financial sectors.
4. Embedded Finance
With the help of embedded finance, the payment system has been revolutionised. Nowadays, various swipe cards, membership cards, and credits are available for customers. Customers get the membership card of a company and are allowed to make purchases and pay later. Also, one-time payments using pre-filled information for various services facilitate convenience.
Having a one-time card from a pizza service can help you pay without filling out personal information repeatedly. Also, these companies offer additional discounts for using these optional services.
5. Personal Finance Management
Nowadays, you can plan your expenses and savings by using a software platform. There are many companies that track your expenditures and help eliminate unnecessary expenses to manage your finances efficiently.
Most of us are not able to use our credits properly and in a planned way. Due to this, our savings are close to null and expenses doubles. With the use of these fintech applications, you can track, manage, prevent and plan your expenses and savings efficiently.
6. Banking
Today, we can easily send payments within seconds from the comfort of our homes, with reliability and safety. A single app can handle all the major services provided by the bank. Now, no more queuing in line to open bank accounts, KYC, and other services. Most of these services can be performed online through a simple software application.
Banking sectors are adapting well to trending technologies and making their services better. It will also help to reduce staffing and increase automation with most of the tasks completed in the application itself.
Some More Major Types of Fintech Industry
Let us take you through some of the rising types of Fintech industry are the insurance sector, Robot Based advice, and stock & trading regulation technology.
- Insurance Technology: Fintech companies can reform the way insurance technology works. It can make them effective, promising. Various immersive technologies and innovative business models such as peer to peer based models, demand insurance, artificial intelligence, internet of things, etc are set to bring a lot of changes in the insurance sector in the coming years.
Proper risk analysis and regulate their frameworks according to the new innovations to suit their potential clients and maintain their interest.
- Robot Based Advice: Robot based chatbots and advice systems are being used by most of the ecommerce websites. These chatbots help to ensure a smooth onboarding of the users who visit the sites. There is much potential in the robot based technologies which will show a rapid expansion with the use of artificial technologies and machine learning.
- Stock & Trading Regulation Technology: Nowadays most of our transaction and money storage are taking place on a virtual platform due to the rise of advanced intelligence networks at a very rapid pace. It is affecting stock industries in many ways.
With the rise of fintech, we can get proper market statistics without the requirement of a third party. Hence, less risk and investment. It can change the status of stocks. So no proper predictions can be made at once. All the important updates are now in one place which reduces the investment overall and makes it a little less lengthy.
Also Read: Why Do You Want To Work In Banking Sector
Fintech Types: Benefits of Working in the Fintech Industry
The Fintech industry is a combination of finance and technology. With the combination of technology, the efficiency of these industries increases. Some major benefits of the fintech industry are given below.
- Payment for most of the services can now be made through a simple application without even exiting the app.
- It helps to bring people and nations together, as payment can be made within seconds in any part of the world.
- It saves time, as with the use of applications, one can easily complete a process within seconds.
- It makes the user feel in control of their investment with better investment tracking systems.
- With the help of mobile applications, most of the services can be accessed easily only by downloading the applications.
- Now, candidates can easily access the services from the comfort of their homes without standing in line.
- These fintech companies can easily help you pay at shops, book trains and flights, pay for electricity and Television, etc.
- These fintech companies offer a variety of opportunities, especially to the freshers. Some important roles are Data analysts, data engineers, software engineers, etc.
- Fintech industries also make sure to earn the trust of their users by providing them with high-level securities and services.
- Fintech industries help merchants connect with the financial markets for selling and buying crypto easily. With the help of blockchain many fraud activities can be kept in check and nullified.
- With the advent of fintech industries, most of the baking services, such as sending money, lending, depositing, and investing, can now be done via apps. It also helps to connect with people around the world.
- There are many platforms available for payment. Now you can use any of your favourite platforms to make payments with reliability. Some of them are Paypal, Apple Payments, Paytm, etc.
Fintech Types: Working of Fintech Companies
Fintech apps work on various approaches. Some of the apps allow users to make payments through various platforms by unlocking financial account data securely. Users can also control their investments, track them and avoid unnecessary transactions. Such as wealth and financial management apps record financial data and make investment plans for the users.
Also, it can help in trading stocks and cryptocurrencies. Some important technologies needed for Fintech apps to perform are APIs and mobile applications (apps or web apps). With the improvement in technologies, these industries are expected to show a rapid surge and progress. Along with it, many new technologies like machine learning and artificial intelligence will also make the fintech industries more effective.
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Fintech Types FAQs
What do you mean by the Fintech industry?
Fintech combines “Financial” and “Technology”. It aims to use the advancements in technology to make the finance sector more adaptable and effective.
What are the three pillars of the fintech industry?
The three pillars of the fintech industries are innovation, accessibility and security.
What is fintech 4?
The fintech four comprises the latest advanced technologies such as artificial intelligence, blockchain, cloud computing and big data.
Is Gpay a fintech company?
Yes, GPay is a fintech company. Fintech industries are helping to make financial services more accessible and reliable.
