What is FinTech?

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Metrics Chartered Professional Accounting is a cloud-based accounting firm, designed to help forward-thinking business owners optimize their financial processes. We are what you would call a “FinTech” company. But what exactly is FinTech?

FinTech – which simply stands for Financial Technology – refers to any company that utilizes tech and innovation to compete with traditional financial methods in the delivery of financial services. Whether that be financial education, organization, investment or retail banking, FinTech is a catch-all term that can adequately describe them all.

For instance, we here at Metrics use a combination of technology and our CPA team to provide comprehensive cloud accounting, including technology reviews and implementation. In the same way that other companies such as Stripe or PayPal would be referred to as FinTech, we also fall under that umbrella.

But it hasn’t always been this way. When FinTech was first getting going, the term exclusively described computer technology used in banks and trading firms. Over the course of the last decade, the title is much more far reaching. As mobile phones have become increasingly ubiquitous and the internet itself is a matter of necessity, mobile banking and investing services are good examples of what it refers to. In 2017, financial technology companies refer both to startups like ourselves and more traditional businesses trying to enhance their preexisting services.

In fact, since 2008, global investment in FinTech has increased more than twelvefold, exceeding $24.7 billion USD in 2016. Tons of companies are popping up all over the world, including the U.K., Australia, and Hong Kong. According to Ernst & Young, in a February 2016 report, the seven leading FinTech hubs included California – ranked first for capital and talent, the United Kingdom – ranked first for government policy, and New York – ranked first for demand. To get a better sense of the kind of companies out there, take a look at the Forbes FinTech50, a roundup of all leading disrupters in financial technology.

There’s no telling where FinTech will go in the next ten years, but it will most certainly accelerate as more capital is invested. Already, financial services of the 20th century have been surpassed, as everything becomes automated.

It’s easy to see why this trend should persist, as the advantages of FinTech are impossible to ignore. Machine learning, which is only one of the technologies associated with FinTech, is an application of artificial intelligence that provides systems the ability to learn and improve from previous experience, all on its own. Utilizing this type of technology will take a lot of the guess work and human error out of accounting services. These applications will improve at an alarming rate and will certainly become the norm if they aren’t already.

So who is using financial technology? Well, besides B2B and B2C businesses, the industry is largely consumer based. If you use an online banking app on your phone, you’re already a part of FinTech! We don’t have to tell you how much easier that app has made all your financials.

To learn more about how our financial technology service can help you, visit our services page. Here, we outline everything we can do for you.