via The Next Web
There’s been a lot of talk about fintech lately. We talk about the billions of dollars being invested in fintech; the wave of unicorns and start-ups in this space; the challenge they bring to banks and incumbents; the way in which they are reaching new spaces and places; but what is fintech? It is no longer this big bucket of finance and technology. In fact, saying ‘fintech’ is like saying ‘retailer.’ But what exactly are they retailing and, in the fintech sense, what areas of finance are these companies automating?
According to The Next Web’s Chris Skinner, the state of fintech can be broken down into a three-stream market of firms using new technologies to offer new services. The first stream creates a new financial structure, like crowdfunding, for example. The second removes friction from financial markets by allowing businesses to set up their payment and checkout system in simple and customized ways through APIs. The third stream of firms are working to cut costs and overcome inefficiencies within banks. Skinner also notes that none of these sectors of fintech firms include a focus on replacing banks, because he believes that the traditional bank will not be going anywhere.