While the term “fintech” has been around for years, it’s worth taking a fresh look at the industry in the face of rapidly advancing technology and a multitude of new players. The financial technology industry encompasses technology-enabled firms offering financial services, as well as entities providing technology services directly to financial institutions. Fintech companies employ technology to support financial transactions among businesses and consumers. Technological advances, changing demand for financial products and competition in financial services are all driving a new wave of fintech startups and investments that have drawn attention to the industry in recent years.
Startup companies are creating products and services to penetrate new areas of the financial system and to change the competitive landscape. These new forces are motivating traditional financial firms to invest in technology and to pay attention to changing trends among their customers. All new and incumbent players will be impacted by the changes we see happening in the marketplace today. But understanding the space and focusing on key developments amid all the hype can be a challenge.
This primer outlines key segments of the fintech industry and institutions operating in the space, highlighting sub-sectors that are experiencing the most rapid change. S&P Global Market Intelligence includes the following sectors within the financial technology industry.In this primer, we will highlight four fintech areas — digital lending, payments, blockchain and digital wealth management — that are of particular interest due to their rapid pace of growth, technological disruption, and regulatory and other risks. While some of these areas represent fintech sectors themselves, blockchain is a technology that carries the potential for innovation across multiple segments of the financial landscape.