FinTech is a word many people have heard but may not know what it means. It is a term used to describe a wide range of use of technology in the financial industry. Whether you are thinking about a career in this field or just interested in what it offers, here’s what you should know.
What is FinTech?
FinTech, or financial technology, is a term used to describe a range of technologies within the financial industry. This may include mobile applications, software, and other tools used to automate or otherwise improve the way businesses and consumers use finance. It may include the use of banking software, blockchain networks, or a wide range of other areas.
A fintech company is an organization that uses technology in some way to improve the financial services they provide to their customers. This could be mobile banking, payment services that allow peer to peer lending, automated management of financial portfolios, or other areas. Some companies that operate in the fintech industry include:
- Venmo
- CashApp
- Wealthfront
- Betterment
- Bitcoin
- Ether
- Dogecoin
- Robinhood
How Does FinTech Work?
Fintech works to simplify financial transactions in some way for the businesses and companies that use it. This could include making certain financial tools or services more accessible and affordable. In some ways, companies incorporate a high level of innovation into solutions by incorporating artificial intelligence (AI), big data, encryption, and other aspects of modern technology to improve access to these services but also to ensure they are secure. Another way that fintech works is by making financial processes more streamlined in some way.
To do this, fintech companies find ways to get rid of the extra steps involved or to streamline the overall way tools are used. For example, fintech companies that focus on peer to peer payments, such as Venmo, allow consumers to instantly, at any time of the day or night, to make a payment to someone else. This process no longer involves operating during business hours or visiting the physical bank building. It’s fast and more efficient as a result.
A Brief History of FinTech
It is easy to associate fintech with innovation and new technology, but it is not a new concept. The first examples of fintech are credit cards, which became more accessible in the 1950s. They allowed consumers a way to carry a type of tool to make payments while they were on the go and at any time.
Over time, fintech incorporated more aspects of technology into it. That includes banks providing access to consumer and business accounts to consumers over the phone and then online. The stock market is another example of the early use of fintech in that it allowed people from around the world to make investments in real time.
PayPal was one of the first more modern fintech companies. Established in 1998, it enabled a way for people to make payments to other people who had a PayPal account, transferring funds back and forth between people and bank accounts.
Over time, fintech has expanded even further to include blockchain networks, mobile payment apps, smart technology payment tools, and social media payment tools.
FinTech Trends 2022
Fintech, by nature, is fast changing. There are a wide range of potential fintech trends to expect in the years to come. Here are some prominent potential fintech trends 2022 many should understand.
Growth of digital banking
Digital banking continues to be one of the fintech tools consumers use. Consumers may expect to find it easier to request and make payments on loans, purchase insurance products, and manage their funds using digital banking tools. One study found that the compound annual growth rate of global digital banking platform markets may grow 11.5% from now until 2026.
AI and machine learning
Another area of significant growth could be in AI and machine learning. These technologies may help fintech companies grow while they provide better access to data. They may be helpful in minimizing fraud and providing companies with more insight into how to offer better products to their customers.
Blockchain
Blockchain is an effective manner of creating a hard to break level of security. Blockchain technology may help organizations to create more secure digital transactions.
Meeting the underbanked need
Fintech may also expand to meet the needs of those who are unbanked or underbanked in the U.S. and across the world. These are individuals who may not have ready access to financial services due to economic conditions or other factors.
What Are Some Types of FinTech?
Several types of fintech exist, each allowing for different types of digital banking methods and providing greater access to the way people pay each other, manage funds, invest, and make purchases. Some examples of the types of fintech used today include peer to peer payments, stock trading, wealth management tools, business payment tools, and eCommerce.
There are many types of fintech companies meeting these needs. For example, Robinhood is an app based tool that enables individuals to make stock trades. As a digital stock trading tool, it enables individuals to step away from the traditional use of a broker client relationship and have direct access to making their own decisions and handling the actual trades themselves.
Another popular fintech type is peer to peer payments. Venmo is one company making that possible. It enables individuals to send funds around the world instantly with the use of a simple account. The account links to the consumer’s bank. That allows people to pay each other for any reason.
How Do You Learn FinTech?
Learning fintech may be a career path for many people to pursue. To do this type of work, individuals typically need to have experience in the field and the necessary education. This could include through college programs, but there are also other options that extend outside of this area. Other options exist as well, including fintech boot camps and self taught fintech skills.
Fintech bootcamps
Fintech bootcamps are a way for individuals to learn the core skills and elements of financial technology in a short, condensed program. These may be available online or in person. They are often a place for students to get started learning about fintech and what it offers. Bootcamps provide structured learning opportunities often very much focused on the topic. They may include hands on learning experiences, various software tool use, and simulations of real world experiences.
Some fintech bootcamps allow students to earn their education within just a matter of a few months. This could make them ready to start working in the field within six months or slightly longer, depending on the program.
Fintech degree programs
It is possible for students to pursue a degree program in fintech. There are a variety of colleges and universities that offer this type of educational opportunity. Students may be able to pursue a bachelor’s or master’s in the field.
Degree programs typically take two to four years to finish. Students spend time taking a range of courses to help provide them with valuable insights into the industry. Some schools offer more opportunities to pinpoint their education. Some programs may be available online.
Self taught fintech
Some people have taught themselves fintech skills. This may be done as it is with other types of computer software and programming. Individuals who wish to pursue this method may need to find free or paid courses online, engage in learning software use, and dive into learning the technical skills they need through a range of hands on experiences.
Being self taught is a bit more difficult for some in that you may need to pursue various online courses or use various tools to learn the necessary skills. Some students may wish to earn a fintech certification to prove their education in the field.
Careers, Job and Salary Outlook
Fintech is a varied industry. There are a range of job options potential in the field. Each area has its own potential earnings and career requirements. Overall, fintech is an area of industry that continues to develop as new technology and resources are available to help improve the way people manage their finances.
There are a range of career options in the fintech industry. Some people work in the area of financial management, which could mean providing people with support as they use fintech technology to manage investment portfolios. Others use fintech solutions as a way to manage compliance.
Also, note that some people working in fintech are doing so to develop new products and services to better meet consumer needs. As a result, there is no way to pinpoint just how much a person in this field may earn, especially if they are self taught and working to develop their own programs or solutions.
Here is a brief look at some industries within the fintech area and their earning potential. Keep in mind that fintech applications may apply to a wide range of areas.
| Current Fintech Careers with Salary and Growth Projections | ||
| Fintech Careers | Current Annual Median Pay | Projected Growth |
| Financial Manager | $131,710 per year | 17% through 2030 |
| Financial Analyst | $81,410 per year | 6% through 2030 |
| Compliance Officer | $75,810 per year | 6% through 2030 |
| Management Analyst | $93,000 per year | 14% through 2030 |
| Sales Manager | $127,490 per year | 7% through 2030 |
| Project Management Specialist | $98,420 per year | 7% through 2030 |
| Information Research Scientist | $131,490 per year | 22% through 2030 |
| Software Developer | $110,140 per year | 22% through 2030 |
| Industrial Production Manager | $103,150 per year | 5% through 2030 |