What is Fin Tech? Very broadly, Fin Tech is “an economic industry composed of companies that use technology to make financial systems more efficient.” Sectors where Fin Tech has started to emerge include the following:
- Peer-to-peer lending (e.g. the previously mentioned Lending Club)
- Crowdfunding (Kickstarter)
- Algorithmic asset management (Wealthfront)
- Thematic investing (Motif Investing)
- Payments (Xoom)
- Data collection (2iQ Research)
- Credit scoring (Zest Finance)
- Education lending (Common Bond)
Investment in Fin Tech has been growing, with more than $3 billion invested since 2008 and growth projected to reach as high as $8 billion by 2018 according to Accenture.
One word that is often used in conjunction with Fin Tech is “disruption”. Just as the emergence of the internet brought the rise of Amazon and iTunes at the expense of book and record stores, Fin Tech is an expression of the possibility that technological advances can lead to new ways of doing business that either damage or alter traditional business plans.
Read the whole article here: Behind the Fin Tech buzz | Resource Investor