Financial technology (fintech) is the use of new technologies to improve and automate financial services. It includes everything from online banking to credit cards, digital payment apps, robo-advisers and even devices that monitor driving habits in order to adjust auto insurance rates.

Fintech enables new products and services that disrupt existing finance companies by offering better, faster or cheaper alternatives. It also aims to expand access to financial services by using digital platforms to reach a broader audience.

While many fintechs are start-ups that receive billions in venture funding, established finance firms also invest in or acquire these new businesses for their technology, traction and customer base. In the past, friction between incumbent and fintech companies has been high, but a growing number of players acknowledge that collaboration is the key to success.

While it’s easy to think of fintech as a recent development, the truth is that financial institutions have been using technology to streamline service delivery and cut costs for decades. Credit card machines and ATMs are a few examples of early fintech innovation. But more recently, the emergence of cryptocurrencies like Bitcoin and blockchain technologies, mobile adoption, artificial intelligence and machine learning are reshaping the way we bank, invest, save and spend. And this is just the beginning. In the next few years, we’ll see the impact of other emerging technologies such as wearables, immersive virtual reality and biometrics. This will take the guesswork and unconscious habit out of spending and saving decisions – and make them more effective.

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