FinTech in 2020 and why you should know about it

Are you using Financial technology?

With the widespread use of technology, new dimensions have opened up in all areas of our lives. Finance, of course, could not be left out of this either.

Fintech (Financial Technology) refers to innovations in the financial field and typically characterizes companies or services that use advanced technology to provide financial services to businesses or consumers.

In general, the term “financial technology” can be applied to any innovation in business, from digital money to double-entry bookkeeping. Since the internet revolution and the proliferation of smartphones, financial technology has grown exponentially. Fintech, which was initially limited to computer technology used in the back office of banks or commercial companies, now describes the widespread use of technology in personal and commercial finance.

Today, from mobile banking and insurance to cryptocurrency and investment applications, fintech offers a wide range of applications. It’s a huge business, supported and adopted by traditional financial institutions – banks – just like startups. 

The underlying ideology makes it easier to give digital-minded customers what they want while the industry moves forward and remains relevant.

Fintech is not a new industry, but it has developed very quickly and almost invisibly. Technology has always been part of the financial world to some degree, be it the introduction of credit cards in the 1950s or ATMs.

Fintech describes various financial activities, such as money transfers, depositing checks with a smartphone, applying for a loan without having to go to a bank branch, raising money to start a business, or managing investments, usually without the assistance of any bank employee.

Applied Technology

Artificial Intelligence (AI) and Machine Learning (ML) 

Artificial Intelligence (AI) and Machine Learning (ML) are fintech’s most commonly used technologies, which may play an even more significant role in the financial industry over time. AI and ML fintech applications include credit rating, fraud detection, compliance, and asset management, among others.

Big Data and Data Analytics

Customer and market data is of great value to fintech companies. The wealth of data provides information on consumer preferences, spending habits, and investment behavior. These data can then be used to develop predictive analyzes.

Predictive analysis is based on past information and mathematical algorithms and shows consumers’ future behavior. The data collected also helps to formulate marketing strategies and fraud detection algorithms.

Robotic Process Automation (RPA) 

Robotic process automation (RPA) refers to manual, repetitive tasks where robotics is used instead of humans to streamline the workflows of financial institutions. The most common applications of RPA are:

  • Statistics and Data Collection
  • Managing Compliance
  • Communication and Marketing Using Emails and Chat Bots
  • Managing Transactions


Blockchain technology is widely used in the financial industry, primarily because of its ability to store transaction records and other sensitive data securely. All transactions are encrypted, and the chances of successful cyber attacks are relatively low when blockchain technology is used. Blockchain technology is also the backbone of many cryptocurrencies.

Now that we know the technology used let’s take a look at FinTech’s most popular and widespread application areas.

Use cases

Mobile Payments

I think I can almost certainly say that anyone who has a smartphone also uses some form of mobile payment.

With the increasingly sophisticated technology, services have emerged that allow consumers to exchange money and payments online or on mobile devices – including the popular Revolut or Venmo payment apps. Not to mention Apple Pay or Samsung Pay apps.

Blockchain and Cryptocurrency

Cryptocurrency and the blockchain are typical examples of how fintech works.

Cryptocurrency exchanges such as Binance or Gemini connect users by buying or selling cryptocurrencies such as Bitcoin or Ethereum.

For example, companies like Wirex provide instant access to a wide variety of cryptocurrencies and traditional fiat currencies. Their services include:

  • Free personal multicurrency IBANs
  • Free Faster Payments, SEPA, and SEPA Instant *
  • Low-cost multicurrency SWIFT transfers
  • Blockchain-powered crypto transactions 

As you can read on their website:

The use of cryptocurrency for international payments is attractive because it cuts out the need for currency exchange, allowing people to use digital assets for payments in the traditional payment infrastructure.

Wirex website

If you try it out, you can do it completely free of charge. All you have to do is open an account online in about 5 minutes. If you do all this by clicking on my referral link, we will both be part of Wirex, Refer-a-Friend Programm. You can read more about this here. I have been using it for a long time, and I am pleased with it.

Crowdfunding Platforms 

Platforms like Kickstarter, Patreon, GoFundMe, and others operate outside of traditional banking.

Community funding platforms allow Internet and application users to send or receive money from others on their platform. They also permitted individuals or businesses to gather funding from different sources in the same place.

Instead of having to turn to a traditional bank for a loan, you can turn directly to investors to support a project or company. And while their applications range from family and friend funding to fan and patron funding, the number of crowdfunding platforms has multiplied over the years.

Robo-Advising and Stock-Trading Apps

Robo-advising is an online investment management service that uses algorithms to optimize assets and create portfolios for clients. They allow users of all ages to conduct investment activities at low fees with minimal effort.

These services can analyze various portfolio options virtually 24 hours a day, seven days a week, and so financial institutions have adopted online Robo advisory services. Banks are now providing such services as well.

Perhaps one of the most popular and most significant innovations in the fintech space was exchange trading applications. Once investors had to go directly to a stock exchange like the NYSE or Nasdaq, now investors can buy and sell shares at the touch of a button on their mobile device.

With cheap and low minimum apps like Robinhood, it’s never been easier to invest with any budget.


Fintech has even revolutionized the insurance industry. Insurtech (as it is called) serves everything from car insurance to home insurance and privacy. Insuretech helps simplify the insurance process by filing claims online and managing policies.

Budgeting Apps

In recent years, fintech has been one of the most widely used applications for consumer budgeting applications, whose popularity has grown exponentially.

Previously, consumers had to create their budgets, collect checks, or move between excel spreadsheets to track their finances. But after the fintech revolution spurred the development of financial services applications, consumers could quickly and effectively track their income. Also, their spending and other fiscal tools revolutionized consumers’ attitudes towards money.

Budgeting apps like Intuit allow consumers to track their income, monthly payments, expenses, and more – all on their mobile devices.

What is the future?

And now let’s look at what 2021 has in store for FinTech according to Forbes:

  1. Enhanced Digitization Of Operations
  2. Robotic Process Automation
  3. Growing Variety Of Mobile Payment Options
  4. Partnerships With Financial Institutions
  5. Increased Focus On Cost Savings
  6. Rise Of Embedded Finance
  7. Bigger Focus On Cybersecurity
  8. Capturing Real-Time Data For Underwriting
  9. Reliance On Behavioral Science Tech

You can read the full article here.

If you have any questions, feel free to contact me. If you liked the article, don’t forget to share it.

And remember, Information is Power.

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