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Decoding Top 5 Types Of Fintech Applications
FinTech

Decoding Top 5 Types Of Fintech Applications

By Deborishi October 15, 2021 - 2,884 views

Today we are experiencing a powerful transforming time where technology is dominating in every sector. be it pharma or financial services, technology is everywhere. No other would have been better than knowing more about fintech applications.  

To sensitise our readers of a novel domain of financial technology or fintech, that has been creating waves in the financial sector for at least 5 years now. We kick off this series with a composition on ‘5 essential Fintech app types that you need to know. Happy reading!

What is Fintech?

As per open-source definitions, Financial technology or Fintech is the technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. It is an emerging industry that uses technology to improve activities in finance.

The top 4 categories of fintech

There are four broad categories of users for fintech:

  1. B2B for banks
  2. Their business clients
  3. B2C for small businesses and
  4. Consumers

Technologies used for fintech applications

Fintech companies use a variety of technologies, including artificial intelligence (AI), big data, robotic process automation (RPA), and blockchain.

  • AI algorithms can provide insight into customer spending habits, allowing financial institutions to better understand their clients. Chatbots are another AI-driven tool that banks are starting to use to help with customer service.
  • Big data can predict client investments and market changes in order to create new strategies and portfolios, analyze customer spending habits, improve fraud detection, and create marketing strategies.
  • Robotic Process Automation is an artificial intelligence technology that focuses on automating specific repetitive tasks. RPA helps to process financial information such as accounts payable and receivable more efficiently than the manual process and often more accurately.
  • Blockchain is an emerging technology in finance that has driven significant investment from many companies. The decentralized nature of blockchain can eliminate the need for a third party to execute transactions.

What are the different types of fintech?

There are various types of fintech companies that exist today, which are mostly categorized based on the industry their clients belong to, which include:

  • Lending
  • Payments
  • International Money Transfers
  • Personal Finance
  • Equity Financing
  • Consumer Banking
  • Insurance
  • Ant Financial

What are the different types of fintech apps that exist?

There are various software applications of Fintech that exists:

  • Crowdfunding Platforms. Crowdfunding platforms like Kickstarter, GoFundMe, and Patreon are the result of developments in fintech
  • Mobile Payments. Mobile payment applications and gateways are some of the most prevalent uses of fintech and act as wallets for both normal currency and cryptocurrency
  • Robo-Advisors
  • Insuretech
  • Regtech
  • Cryptocurrency exchange

However, we can broadly classify them into 5 types of fintech apps:

Types-of-Fintech-Apps

Digital Payments

Digital payments refer to making payments in a cashless manner, quickly and safely. Fintech apps with online payment systems, e-wallets and digital currencies facilitate digital payments. 

Digital payments tend to be one of the most prominent branches of the fintech industry. Statista estimates that global digital payments’ value will reach USD 6,685,102 Million by 2021. 

Digital Banking

Banks develop fintech apps for their clients as digital banking has become a very convenient way for their users to manage their bank accounts and for bank officials to manage their clients’ data. 

Digital banking fintech apps help users manage their bank accounts online without visiting banks at every minor inconvenience.

Digital Lending

Digital lending fintech apps include loan apps and lending software that facilitate conversations and settlements between lenders and borrowers. Financial institutions like banks and individual lenders use fintech apps to simplify loan procedures and manage them efficiently.

Digital Investment

Digital investment fintech apps allow investors to research and invest in different financial assets and stock markets. Such apps supply relevant and insightful data to users to make informed decisions about their investment plans and act as a platform to facilitate investments. 

Consumer Finance

Consumer finance fintech apps help their users in personal finance management. Such apps provide relevant tools and features to users to manage their expenses well, plan budgets and indulge in thoughtful spending.

Now that you know about the different kinds of fintech apps let’s look at the various innovative trends to build a fintech app.