Financial technology, or fintech, refers to a broad range of technologies that use digital tools to improve and automate financial services in new ways. It encompasses a wide variety of businesses, from consumer credit apps that offer buy-now, pay-later options to online marketplaces that link borrowers and lenders (e.g., peer-to-peer lending). Some fintech companies challenge the core business functions of traditional financial services firms — for example, credit card companies like Affirm seek to cut banks out of the online shopping process by offering consumers immediate, short-term loans. Others, such as robo-advisors, provide automated investment planning and advice without human interaction or supervision.
Many of the most innovative new fintech companies are start-ups, but established banking institutions and other traditional financial services organizations are increasingly looking to partners with promising new technologies. They see the need to modernize their customer-facing offerings as well as their back-office processes in order to stay competitive and meet customer demand.
The COVID-19 pandemic has accelerated the pace of innovation in financial services, with startups and established banks alike seeking ways to serve customers through digital channels. This digital revolution is being driven by an increased appetite for innovation among consumers and investors, increasing penetration of mobile devices in many markets, a growing global middle class, and regulatory change. In the short term, this is creating a lot of anxiety for financial services institutions as they struggle to find ways to deliver on the promise of fintech. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/