The word Fintech is a compound term that comes from the English and that comes out from joining the first syllable of the words Finance and Technology , that is, it is a word that arises from the union of two and that brings together all those financial services companies that They use the latest technology to offer innovative financial products and services.
The Fintech will change the traditional finance sector up and down, both at the level of individuals and companies , because although its size is currently very small and does not concern banks, it is expected that this sector will grow exponentially and that for the next 3 years the figures of millions that move Fintech companies across Europe are billions, especially in the United Kingdom and the US.
They are engaged in intermediating in the world of finance in multiple aspects, in money transfers, in loans, in purchases and sales of securities or in financial and investment advice, to name a few areas in the that multiple Fintech companies are appearing.
The Fintech companies are growing so fast because after the great crisis after the fall of the big investment bank Lehman Brothers there was a huge dissatisfaction with the operation of traditional banking and mushrooms appeared with new investment and financing alternatives that covered part of that gap left by the discredit of traditional banking that stopped financing individuals and businesses to lick and heal their wounds.
As the investors left very scared of all that, they became somewhat distrustful and that has caused the Fintech companies to grow at the beginning slowly, but as new legal regulations are approved and the investor sees that they are trustworthy companies, little by little has been losing that fear and now the intermediation in finance through Fintech companies Thinking Capital are multiplying, year after year.
Above all it is due to the birth of new technologies through the internet that is allowing the user a better control of their money and their investments, thanks to ICT (Information and Communication Technologies) the financial world is being transformed, just as one day they transformed the world of music or written journalism, now they are going to transform our finances since from a simple Smartphone we can control all our finances in a faster, agile, safe, simple and, above all, much more economical
The Fintech companies have realized the immense pie that a few banks were distributed to each other and have decided to put the spoon, the banks in their immobility and in their desire to fatten their income accounts, with their monopoly of finance. They have been resting on their laurels and now Fintech companies are eating their toast offering the user a much better, nice and cheap alternative to their finances.
We are sure that in the future there will be fewer and fewer commercial banking offices on the street and that will be due to the development of the Fintech companies, which will offer the same services but online.
Types of Fintech companies?
Fintech companies are companies that mediate in all areas of the world of finance acting as brokers, as payment mediators, as issuers and receivers of transfers or as financial advisers. Let’s see what types of Fintech companies exist and in what areas they act.
1- Financing of individuals and companies
Here we have, for example, the Crowdlending companies, which are companies that put small investors in contact with applicants for financing through their website and who accompany them, analyze them, advise them , they help them make their investment decisions and they are responsible for collecting the fees from the lender and for investing the interests and principal of the loans in which they invest.
2- Transfer of funds
Before the monopoly had banks and therefore charged large fees for transferring money, now have emerged many companies that make transfers at very affordable prices.
3- Financial and investment advice
Formerly banks also controlled this sector of advice, but as a result of the emergence of the Internet and the development of new communication technologies, Fintech companies have been appearing that have been occupying this sector of the market. advice and now there are many investors who come to them before making their investments to be well advised and that does not cost a kidney such advice.
4- Payments and collections through Smartphone and mobile devices
There are already a lot of Fintech companies that allow you to use your mobile or tablet to pay for your purchases, they are even ahead of traditional banking, they are leaders in this sector and The number of shops and platforms that allow you to use this agile and innovative means of payment does not stop growing.