Financial technology (English: Financial technology, referred to as FinTech) refers to an economic industry formed by a group of enterprises using scientific and technological means to make financial services more efficient. The goal of these financial technology companies when they are newly founded is to disrupt the large financial enterprises and systems that are not scientific enough. Even in the United States, one of the most advanced digital economies in the world, although the evolution of this change in financial services is still at an early stage, after the COVID-19 epidemic, the digitization of the financial industry in various countries has accelerated. Academically, financial technology can be divided into four categories: artificial intelligence, blockchain, cloud computing and big data. Some scholars call it "ABCD" of financial technology.
The National Digital Research Centre in Ireland (NDRC) defines financial technology as a kind of "financial service innovation", and recognizes that this term can also be used to refer to those fields where technology is widely used, such as front-end consumer products, competition between new entrants and existing players, and even innovative technologies of blockchain and Bitcoin. At the same time, it was also pointed out that because most of the financial industry is conservative, so as long as the central financial services are digitized, they can be broadly referred to as financial technology. For example, after the COVID-19 epidemic, pure online banking opened in all countries belongs to them. FinTech can be said to be a new type of solution, which has the characteristics of strong disruptive innovation for the development of business models, products, processes and application systems in the financial services industry. These solutions can be classified from the following five significant differences. [8]
The banking industry and insurance industry belong to two different business areas: the solutions of the insurance industry are often referred to as "InsurTech".
Support different business processes, such as financial information, payment, investment, financing, investment consulting, cross-process support, etc. Mobile payment system is one example.
Different target customer groups: retail finance, corporate finance and private banking are different in the banking industry due to different customer groups; The insurance industry can be divided into life insurance and non-life insurance. For example, telematics-based insurance, which is based on telecommunication and information processing technology, usually refers to risk assessment with the help of smart car systems, is to calculate life insurance premiums by using customer behavior in the non-life insurance field.
Communication modes are different: business-to-business (B2B), business-to-consumer (B2C), and consumer-to-consumer (C2C). Social trading solutions is a kind of C2C.
Different market positioning: for example, some solutions only provide complementary personal financial management services, while others may focus on providing competitive solutions such as P2P network lending.
Fintech has been used to automate insurance, trading and risk management. This service may come from different independent suppliers, including at least one licensed bank or insurance company. The interconnection has been realized through open application interfaces and open banking services, and is supported by European payment service directives and regulations.
When trading in the capital market, the innovative electronic trading platform can promote trading online and in real time. Social trading networks allow investors to observe the trading behavior of their peers and expert traders and follow their trading strategies in currency exchange and capital markets. The platform requires little or no knowledge of the financial market, and is described by the World Economic Forum as a subverter of providing "low-cost and mature alternatives to traditional wealth management institutions".
Intelligent investment advisers are a kind of automated financial advisers that can provide financial advice and investment management online with moderate to minimal human interference. They provide digital financial consultation according to mathematical rules or algorithms, so they can replace human consultants as a low-cost alternative.
