SIX fintech sectors transforming the financial industry

Fintech – short for financial technology, is transforming the world through many avenues encompassing all areas of the global economy. From digital payments and lending to retail, banking, cryptocurrency and more. We list the top six fintech sectors that are driving change and innovation in the financial world.

Lending

Leading fintech lenders: Klarna, Affirm, Funding Circle, LendingClub

The lending sector has become increasingly visible over the past decade, as innovation and technology have driven disruption that puts the customer at the heart of the lending space. Credit cards and traditional-style bank loans are being replaced by BNPL, peer-to-peer financing, payday loans, and more. Credit cards are also digital – eliminating the need for customers to carry cards in their wallets. Instead, the transactions can be done through the card’s mobile app.

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Personal Finance

Leading personal finance providers: Mint, Credit Karma, Wallethub, NerdWallet.

Personal finance fintech offers a wide range of services that use modern technology to assess customers’ needs and provide them with products that will streamline and grow their finances. For example, Mint’s goal is to provide information that educates users in making financial decisions. The fintech offers reviews and comparisons of different financial products, including investment, insurance, loans, banking and credit cards.

Digital banks

Leading digital banks: Nubank, Revolut, N26, Monzo.

Digital banking has transformed the way customers interact with their finances because they offer all products and services online, and can process requests for account changes, deposits, loans and crypto services in real-time. Their processes are streamlined and because they operate without or with minimal branches, they can also pass the savings on to their customers. Digital banks are also thriving as they offer super apps that cater to customer needs and demands with agile and streamlined services.

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Centralized crypto exchanges

Leading cryptocurrency exchanges: Binance, Kraken, KuCoin, Coinbase

Regulated, centralized crypto exchanges provide digital currency investors with a more secure platform through which many cryptocurrencies can be bought and sold. Decentralized finance is still an unstable environment vulnerable to many scams and fraud rackets. However, as public and private blockchain networks grow, their reach is expanding into mainstream finance.

Institutional investors

Leading fintech investment companies: BlackRock, Vanguard Asset Management, JP Morgan Asset Management, BNY Mellon Investment Management

Institutional investors specialize in wealth management. They invest capital on behalf of their customers. Services include buying and selling of stocks or securities, bonds, mutual funds and investment funds. They have extensive market research knowledge and today, harness the latest technologies to read the markets and assess behaviors through AI data science.

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Digital payments

Leading digital payments providers: PayPal, Stripe, Adyen, Wise

The digital payments space has expanded massively over the past three years. The pandemic has resulted in more customers demanding contactless services, while business enterprises have also streamlined their transactions. Faster, safer, lower-cost payments are also increasingly customer friendly, with increasing options for mobile payments, QR code payments, cross-border transactions and blockchain technology transactions. The increase in the number of remittance companies is also reflective of an increasingly mobile global population that requires seamless transactional services across continents.

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