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What is Fintech? Understanding the Basics of the Digital Side of Business

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If you’ve ever paid a bill online, backed a crowdfunding platform, deposited a check with your phone, or reimbursed a friend with a payment app, you’ve taken part in the industry known as fintech. The buzzword is prevalent throughout the business world, but what exactly is fintech? And what does it mean for both consumers and businesses?

A Brief Definition

Put simply, fintech is the combination of finance and technology. The rapidly growing industry encompasses software and hardware in the financial space — with a major focus on innovation and transformation. While technology intended to streamline financial transactions is nothing new, there is now a major push from investors and consumers alike to disrupt the financial industry. Innovating “new and different” features and solutions are vital to the ever-evolving business world, and fintech products and services are the way businesses stay relevant and competitive.

A closeup photo of someone’s torso and hands. One hand holds a credit card and the other is typing information into a phone. There is a digital illustration over the phone to imply it is connected to the internet and sending digital information.

How Fintech Began

The beginnings of fintech started in the 1970s and 1980s when banks began utilizing computer systems in their day-to-day operations. ATMs, credit cards, and centralized banking all moved the financial services industry forward. At inception, they were innovations that changed the way consumers and businesses across the world interacted with each other. Fintech draws its inspiration from these technologies, with creators and investors striving to imagine the next generation of business innovation.

What Makes Fintech, Fintech?

While computer systems and credit cards made waves in finance when first introduced, they are now considered settled technologies. They are established, well-known, and extremely prevalent. No longer would these technologies fit into the fintech category. Several characteristics help differentiate fintech from other technologies.

  • Innovation — fintech thrives on pushing the boundaries of finance and technology with new solutions and processes.
  • Useable by Many — fintech solutions revolutionize industries because they work for many consumers, many organizations, or both. Custom solutions built for one company may move that organization forward, but not the industry. When the solution is able to expand to serve multiple stakeholders — be it through investment or allowing other organziations to utilize the services — then it becomes true fintech.
  • Powered by Financial Insight — the ideation of a specific service or product may come from someone not fully enmeshed in finance but for true innovation, true fintech, background knowledge is vital. These insights can come from advisors and investors but often come from creators looking to find a better way to do business.
  • Focus on Process — innovation is more than a product or service, especially when business transactions are involved. Fintech should also consider the ways in which business is conducted, streamlining processes, strategies, and timelines.
  • Real Usefulness — there are many faces of fintech, but the key to staying power is a use that spans businesses and consumers alike. Usefulness doesn’t have to be exciting and new, it could be a contemporary update to a well-known service, or it could be as simple as a cheaper way to bring products and services to life.
A group of three people in the middle of a brainstorm. One is talking and gesturing, the others are listening and reading colorful sticky notes on the wall.

A Future with Fintech

With new fintech innovations popping up every day, bringing consumers faster, easier-to-use financial services has never been more accessible. Making daily transactions and interactions is, and will continue to be, an achievable and ongoing goal of all organizations. Whether the products and services provided are direct business-to-consumer (B2C), business-to-business (B2B), or a hybrid, fintech will deliver better solutions that reduce friction and help ensure we are all up to date within finance.

Check out our 12 Fintech Predictions for 2024 to see what we are envisioning for the near future.


Whether you passively interact with fintech through apps and services or are dedicated to making big changes, there are many benefits financial technology can provide. Check out some of the latest innovations we’ve been collaborating on with Apex Fintech Solutions.

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