Fintech is a technique that shows the use of innovative techniques for products, systems, and machines used in the finance business. It includes broader applications (P2P payment system and mobile banking) that are integrated with trending technologies like blockchain. In this blog, we will explore what fintech is and the different types of fintech shaping the industry.
What is Fintech?
Fintech, the merger of two commonly used terms “Finance” and “Technology”, is the utilization of trending technologies in the finance and banking sectors to make operations smooth and minimize human errors.
It automates financial services and involves progressive technologies like artificial intelligence, machine learning, IoT, blockchain, cloud computing, and open-source software.
You can also find the complete list of fintech companies in India in this blog.
What is the Purpose of Fintech?
The fintech companies concentrate on reducing expenses and providing easy access to payment and investment solutions. Fintech has the purpose of efficacy, accessibility, and affordability in the finance industry with the integration of hi-tech solutions. The sector can improve and meet customer needs using technical tools, applications, and solutions.
Types of FinTech Industries
The fintech industry is divided further into some types as per their business-specific use. The different types of fintech are:
1. Payments (PayTech)
The fintech payment platforms are used to transfer money online and make payments with ease.
Ex- Digital banking apps, mobile wallets, and online payment gateways.
2. Insurance (InsurTech)
The platform or application enables personalized insurance products and effortless applications digitally.
Ex – Personalized policy applications, and tracking systems.
3. Lending (LendTech)
The technology used by the borrowers to lend money without the interference of the traditional banking facilities.
Ex – Applications used for loan processing and making data-driven reports.
4. Personal Finance Management (WealthTech or PerFinTech)
Many fintech companies use digital tools or systems to manage personal finance, track budgets, plan savings methods, and control expenses.
Ex – Applications or software used by top financial technology companies in India planning financial strategies.
5. Regulatory (RegTech)
The platform or software focuses on effectively supporting finance regulatory responsibilities. It is used to enhance finance sector compliance.
Ex – Applications or systems with frameworks used for compliance monitoring & reporting.
6. Online Trading Platform (TradeTech)
The software or application used to know about international commerce and understand trade processes both user and business models.
Ex – The applications and systems that allow digital stock selling and provide real-time market analysis.
7. Consumer Banking (BankTech)
Numerous fintech companies use systems and digital platforms to provide instant banking solutions and brands/services.
Ex – Applications and software used by traditional banks for better user experience and quick availability.
8. Accounting (AccounTech)
The software or system that is used by the finance industry for tax and finance data handling to automate operations and accounting services.
Ex – Digitized tax software and platforms that handle data, analyze it, and perform predefined tasks.
The top fintech companies in India offer custom software development, app development, and financial technology services.
9. Equity Financing (EquiTech)
The applications and systems used for crowdfunding. In it, the user sells or buys shares to/from investors, public, or finance institutions.
Ex – The applications or systems involve crowdfunding among the participants.
10. New Age Banks (NeoBank)
The software, applications, or systems used by fintech companies abate physical bank location requirements and focus on digital banking service accessibility.
Ex – The software or application that runs the entire bank online service without a physical location.
Different types of fintech companies use several advanced technologies to enhance the fund transfer using the digital methods wisely. The prominent ones are blockchain, cryptocurrency, IoT, cloud computing, open-source software, hyper-automation, and AI (Artificial Intelligence).
What is the Future of Fintech in India?
With the integration of technology in the finance sector, it is expected to grow drastically shortly. Many companies are competing with each other in the market in their fintech sub-category competitors. The digitization adopted by traditional businesses and companies working in the finance industry is modernized by advanced methods such as AI, blockchain, IoT, and digital banking alternatives. This is anticipated that the implementation of applications and software will enhance the overall growth of the Indian economy.
What Companies Use Fintech?
Fintech is predominantly used by financial institutions including banks (traditional), investment firms, insurance, retail, real estate, and E-commerce online platforms. The top fintech companies in India provide digital payment methods (wallets and applications), and blockchain-based monetary transactions to these sectors for the enhancement of processing and efficacy.
Difference Between Fintech and Techfin with Examples
Most people believe that these terms mean the same but there is a slight difference between them. FinTech technology is the finance industry integrating the technology to provide superior customer experience. TechFin technology is the technology’s involvement in the finance sector for enhanced user interaction. With the TechFin services, you may find numerous techfin companies in india offering the best technology merger with the finance sector. The former involves the tech-solutions in the finance industry and the latter is adopted by the current tech businesses to access the finance sector.
- Fintech Examples – BharatPay and PayTm.
- Techfin Examples – Google and Amazon.
What Do Fintech Companies Do?
Fintech companies are responsible for providing various financial services using technology. It offers various solutions including monetary lending, personal finance management, investment solutions, digital insurance, and others. The fintech companies use advanced technologies to improve overall efficacy in financial transactions and related services.
Conclusion
The types of fintech companies are highly beneficial for businesses as they benefit from monetary transactional smoothness. These companies provide personalized services and fulfill the needs of financial institutions and individual users. Whether you run a business or plan it, you should consider the best fintech companies in India as alternatives in the market.