You may have heard the relatively new term “FinTech” bandied about, but what actually is it? And why is it important for all entrepreneurs to know about and understand?
FinTech stands for Financial Technologies, and in its broadest definition, that’s exactly what it is: technologies used and applied in the financial services sector, chiefly used by financial institutions themselves on the back end of their businesses. But more and more, FinTech is coming to represent technologies that are disrupting traditional financial services, including mobile payments, money transfers, loans, fund-raising, and asset management.
Don’t assume that FinTech is simply a fad or buzzword: Accenture recently released a report which found that investment in fintech around the world has increased dramatically from $930 million in 2008 to more than $12 billion by early 2015.
And this is likely only to continue to increase, as FinTech touches not just the financial services sector, but every business the financial services industry deals with (which is to say, all of them). FinTech startups are small and agile, able to disrupt the lumbering behemoths that are traditional financial institutions and innovate quickly — and your business can use that to your advantage.