Fintech is a term used to describe financial technology, an industry encompassing any kind of technology in financial services - from businesses to consumers. Fintech describes any company that provides financial services through software or other technology and includes anything from mobile payment apps to cryptocurrency.
So how is fintech being used in 2020, and what are some of its traditional uses?
1. Crowdfunding Platforms
Companies like Kickstarter, Patreon, GoFundMe and others illustrate the range of fintech outside of traditional banking.
Crowdfunding platforms allow internet and app users to send or receive money from others on the platform and have allowed individuals or businesses to pool funding from a variety of sources all in the same place.
2. Blockchain and Cryptocurrency
Cryptocurrency and blockchain are hallmark examples of fintech in action.
Cryptocurrency exchanges like Coinbase and Gemini connect users to buying or selling cryptocurrencies like bitcoin or litecoin.
But in addition to crypto, blockchain services like BlockVerify help reduce fraud by keeping provenance data on the blockchain. And while cryptocurrency and even blockchain may be somewhat controversial uses of fintech, they have certainly taken parts of the investment world by storm in recent years.
3. Mobile Payments
It seems as though everyone with a smartphone uses some form of mobile payments. In fact, according to Statista data, the global mobile payment market is on track to surpass $1 trillion in 2019.
Using increasingly sophisticated technology, services have emerged that allow consumers to exchange money and payments online or on mobile devices - including popular payment app Venmo.
Fintech has even disrupted the insurance industry. In fact, insurtech (as it's been so-called) has come to include everything from car insurance to home insurance and data protection.
Additionally, insurtech startups are increasingly attracting funding, with insurance startup Oscar Health securing some $165 million in funding in March of last year - at a $3.2 billion valuation, according to CNBC.
5. Robo-Advising and Stock-Trading Apps
Robo-advising has disrupted the asset management sector by providing algorithm-based asset recommendations and portfolio management that have increased efficiency and lowered costs.
Since the rise of more advanced technology that can analyze various portfolio options 24/7, financial institutions have adapted to offer online robo-advising services - including the likes of Charles Schwab (SCHW) and Vanguard.
There are plenty of exciting fintech stocks - whether new to the market or tried and true staples.
PayPal has long been a favorite on the market, even despite recent weak forecasts for 2019. In fact, PayPal racked up some 267 million users worldwide as of the end of 2018 - adding some 31% more accounts for the year.
But apart from the mobile cash app, there are several other fintech stocks catching analysts' eyes.
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