Understanding Financial Technology

The financial technology (fintech) industry is thriving globally and received $17.4 billion in investment last year alone.

Broadly speaking, FinTech (financial technology) is anywhere technology is applied in financial services or used to help companies manage the financial aspects of their business, including new software and applications, processes and business models.

According to EY's Fintech Adoption Index, a third of consumers worldwide are using two or more fintech services, with 84 percent of customers saying they are aware of fintech (up 22 percent from the previous year).

Let’s cover some terminologies you need to know to understand the sector.


It stands for Financial technology, and those engaged in the industry develop new technologies to disrupt traditional financial markets. Fintech companies utilize technology as widely available as payment apps to more complex software applications such as artificial intelligence and big data.


Bitcoin as a peer-to-peer (P2P) payment network without the need for governance by any central authority. It has its application programming interface (API), price index, and exchange rate.

Problems include thieves hacking accounts, high volatility, and transaction delays. On the other hand, people in third world countries may find Bitcoin their most reliable channel yet for giving or receiving money.


Cryptocurrencies emerged as a side product of Bitcoins. It is a form of digital money that is designed to be secure and, in many cases, anonymous. It is also a decentralized digital currency which uses encryption - the process of converting data into code - to generate units of currency and validate transactions independent of a central bank or government.

Bitcoin is not the only one, there are other forms of virtual cash, such as Litecoin, Ripple and Dash.


Blockchain is a form of distributed ledger technology (DLT). This means that it maintains records of all cryptocurrency transactions on a distributed network of computers, but has no central ledger. It secures the data through encrypted 'blocks'.

Various blockchain experts believe the technology can provide transparency for a multitude of different industries, not just the financial services.

The original blockchain network was created by bitcoin-founder Nakamoto to serve as the public ledger for all bitcoin transactions.


Ethereum is another type of blockchain network. It differs to the original blockchain in that it is designed for people to build decentralized applications. These are applications which allow users to interact with each other directly rather than having to go through any middlemen, Buterin said, explaining the project in 2014. Ether is the value token of the Ethereum blockchain. It is traded on cryptocurrency exchanges.


A blend word of 'regulatory technology'. RegTech is pretty much what it says on the tin: the use of new technology to facilitate the delivery of regulatory requirements. It consists of a group of companies that use technology to help businesses comply with regulations efficiently and inexpensively.


InsurTech is the technology behind insurance, that simplifies and improve the efficiency of the insurance industry. InsurTech is not just an increase in the way that technology is disrupting the insurance industry, but is also changing consumer expectations and demands.

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