It is becoming increasingly common to come across this term in the media or in business conversations, and the fact is that in recent years, fintech companies have played a major role on the international stage.

But, What exactly are fintech companies?

Fintech companies are those in the financial sector that incorporate technologies into their business models to improve processes and services in terms of automation, efficiency, and security.

The term is derived from the combination of the concepts “finance” and “technology,” so a literal translation would be “financial technology.” 

These companies are characterized by rapid growth, innovative business models, and customer-centric products and services, with a focus on providing users with the simplest and most intuitive experience possible. To achieve this, the companies integrate technologies such as artificial intelligence, big data and data mining, robotic process automation (RPA), and blockchain.

Technological advances have enabled companies to offer a wide variety of services to customers at a much lower cost, without cumbersome paperwork and even without having to visit an office, or to provide them with access to products that were previously simply out of reach. Among the solutions they offer are:

• Payment gateways: Online payment management platforms that are essential for conducting transactions in online stores and e-commerce services, benefiting both small and medium-sized businesses and customers.
• International Money Transfers: Through the use of technology, money transfers can be made much faster and at much lower costs than those of traditional competitors.
• Loans: They can be used to finance projects much more easily and quickly. It’s becoming increasingly common to see crowdfunding and factoring platforms via these digital channels, connecting investors and entrepreneurs.
• Open banking: Financial information is collected from users and shared with third parties, thereby streamlining and increasing the transparency of lending and financing processes.
• Investments: There are numerous fintech companies that focus on making the world of investing accessible to users in an easy and intuitive way, allowing them to invest and track their progress clearly and quickly.

In recent years, with the widespread use of smartphones and the public’s growing trust in digital services, the services provided by fintech companies have seen exponential adoption. As a result, the banking industry has been challenged by the rapid rise of these companies, which are set to revolutionize the way people interact with money. Over the next few years, we will see how traditional banks must adapt to this change or form partnerships with these fintech companies to cope with their meteoric rise.

Leandro Mora

AGF Team

FYNSA