Exploring Fintech: How it Operates and Innovates

Financial technology, or FinTech, is a general term for various technologies used in the financial sector and businesses to address various financial tasks and improve financial services. FinTech also refers to an entire industry where companies operate using new and innovative financial technologies and solutions to compete with traditional financial institutions such as banks, insurance companies, and others.

Primarily, these are technology startups and companies that enhance their services or create new ones using FinTech tools. 


Directions of FinTech

Over the decades of FinTech industry development, numerous categories have emerged in which banks and FinTech companies operate:


Personal Finance

Mobile and desktop applications from startups that help individual users manage their finances, analyze expenses, and receive forecasts about future expenditures in the form of detailed reports.



FinTech tools address the issue of the two billion people without bank accounts or access to traditional financial services, providing them with access to basic financial services. Mobile internet, smartphones, and progressive approaches to financial transactions enable access to financial payments even in areas without traditional banking institutions.



FinTech platforms offer investors the opportunity to invest in various assets (stocks, bonds, cryptocurrencies) through mobile applications or websites. Such platforms also grant investors access to markets and assets that were previously inaccessible or complex to invest in.



FinTech services provide loans or credit to consumers or businesses without the intermediation of banks or other financial institutions. Such services are also known as P2P (peer-to-peer) lending or crowdlending.



FinTech companies that offer insurance products or services using digital technologies. These companies are also known as Insurtech and utilize digital technologies to reduce costs and enhance the convenience of insurance.


RegTech (Regulatory Technologies)

FinTech solutions that help companies comply with financial legislation and regulatory requirements. Such solutions also assist companies in reducing risks and improving the efficiency of their operations. Examples of such solutions include IdentityMind Global, Onfido, Chainalysis, and others.



Not just a technology, but also a concept of decentralization and trust in the financial sphere. Blockchain is a distributed database (ledger) consisting of interconnected blocks of information. It ensures data security, transparency, and immutability without the need for centralized intermediaries. Blockchain can be used to create digital currencies (cryptocurrencies), smart contracts (self-executing contracts), decentralized applications (DApps), or other digital solutions. Examples of blockchain solutions include Bitcoin, Ethereum, Stellar, and others.


Neo Banks

FinTech companies that offer banking services without physical branches or licenses. Such companies typically provide online accounts, cards, transfers, deposits, and other services through mobile applications or websites.



FinTech technologies allow the creation and use of digital currencies independent of central authorities or intermediaries. These technologies provide anonymity, security, and global transaction capabilities.


B2B FinTech

An area focused on solving settlement and data exchange issues in businesses. Smart contracts based on blockchain technologies are under significant attention in this area.


Each year, there is a growing number of industries and directions in FinTech, especially with the widespread adoption of AI in virtually every service.


Impact of FinTech on Business

FinTech significantly influences businesses by offering new opportunities to manage finances, reduce costs, and enhance efficiency, and competitiveness. FinTech provides various services to optimize business processes, improve analytics and decision-making, strengthen security, and comply with regulatory requirements. Cloud solutions, blockchain technology, artificial intelligence, and big data analysis are among the services that fall under this category.

Moreover, FinTech creates new business models and markets that previously did not exist or were inaccessible. FinTech companies can offer innovative and personalized products and services tailored to customers’ needs and preferences. They can also collaborate with traditional financial institutions or other industries to create synergy and additional value for customers.


FinTech is not just a set of technologies; it is an industry that is transforming the financial sector and businesses as a whole. FinTech makes financial services more accessible, convenient, affordable, and secure for individuals and companies. It contributes to financial inclusion, business process optimization, and the creation of new business models and markets. FinTech is the future of finance, and that future is already here.


A quick historical overview for the curious

The first example of fintech can be traced back to as early as 1950 when the first credit card in the world, the Diners Club credit card payment system, was created. It was designed for entertainment and travel payments and came about when one of its co-founders, Frank McNamara, ran out of cash to pay for dinner at a restaurant in New York.

Subsequently, the first bank credit card emerged. In the 1950s and 1960s, self-service points at gas stations, supermarkets, and public transport paved the way for the introduction of ATMs. The 1970s saw the rise of the first electronic auctions.

In 1984, the term “fintech” was first mentioned by Peter Knight in an article for The Sunday Times. He described a bot that made changes to his email. The bot was created by First Direct, which became the first bank to operate solely by phone and Internet.

However, the real fintech boom occurred after the global financial crisis of 2008-2009 when many people lost trust in traditional banks and started seeking alternative ways to manage their finances. The proliferation of smartphones, cloud technologies, blockchain, and artificial intelligence also played a significant role in the development of fintech. All these factors contributed to the emergence of new players in the financial services market, offering customers more convenient, affordable, and secure solutions.