FinTech – The Technological Revolution In The Financial Industry


It is unnecessary to be in the banking and finance sector or the technology industry to hear the term fintech. Although at first they were seen as enemies by the large banking entities, they have considered the startups with the best projection within the industry.

Let’s start by clarifying what is referred to when talking about fintech. The term is a fusion of finance and technology, derived from the English words finance and technology. It refers to all those companies whose core business is technological developments that seek to improve, automate, provide or democratize access to financial services.

In this way, the definition is clear, but the scope and the true impact these companies have had on today’s society are simplified. To put the relevance of fintech on the table, it is important to review some data:

  • Global fintech investment increased 173% in the third quarter of 2021 compared to the same period in 2020.
  • Latin American fintechs raised a total of US$7.6 billion, according to figures from the Latam Fintech Hub.
  • Only the Pacific Alliance (Mexico, Colombia, Peru and Chile) operate 1,102 fintech.
  • Between the second and third quarters of 2021, Asia Pacific had a 97% growth in fintech investment compared to the same period in 2020.

How Does Fintech Work?

If something can be taken for granted with fintech companies, they were born to revolutionize the financial industry and traditional banking through technology. Now the next question is how do they do it? And there is another element of success for fintech. They cover so many fields that their scope seems to have no limit, and, best of all, they have challenged the classic structures and created innovative systems that respond to important needs on the global scene.

Some financial technological developments contemplate innovations in regular banking operations, means of payment, electronic money, agility in economic processes, and collective financing activities. This broad field of action has allowed it to open financial services to unbanked people, a sector forgotten by traditional banking.

Some of the main segments in which fintechs operate are:


They are platforms created to obtain collective financing for a project. It is a collaborative platform since contributions can come from anyone and can be made in exchange for a reward or altruistically.

Digital Credits

Access to credit requires a rigorous process established by the banks, which sometimes, in addition to being exhausting, also becomes very exclusive. The ingenuity of fintech allowed systems through which people and even companies can access credit from a mobile device. These credits usually have more comfortable conditions and amounts, so they represent a less risky alternative for the user.

DeFi or Decentralized Finance

The World Economic Forum states that DeFi or decentralized finance aims to transform traditional forms of financing by rebuilding and reinventing services. This is nothing more than financial services that work on public blockchains and allow users to do most of the services banks support, such as earning interest, borrowing money, lending money, trading derivatives, assets, etc. An example of a blockchain is Ethereum.


It comes from insurance (insurance) and technology (technology). The insurtech segment refers to technology applied to the insurance sector. Therefore, it ranges from offering ultra-personalized policies to using Big Data and Artificial Intelligence to establish dynamic premiums for policies based on observed behavior.


They are 100% digital financial entities that offer banking intermediation services as a traditional bank, but virtually, without physical branches or queues to be served. However, they are supervised by the relevant regulatory entities.


They are acronyms that refer to Personal Finance Manager (personal finance managers). They are platforms or tools that allow people to understand and manage their financial situation and manage their money more easily and quickly.


It is about using technology to enable the transfer of value. An example is hidden payments through electronic wallets.


It is the combination of Regulation + Technology. It seeks for financial institutions to be able to use technology to improve compliance with regulations and regulations more easily, thus promoting business efficiency.

SME Finance

It refers to small (small) and medium (medium) companies (enterprises) and how innovative and technological solutions can be offered to facilitate their access to the financial world and unlock sources of capital.


It comes from the English words wealth and technology. It refers to using technologies such as big data artificial intelligence, among others, to search through automated managers to provide advice on digital portfolio management and the best option to invest.

Fintech, Unprecedented Evolution

In a very short time, fintech managed to go from being a set of technological products and solutions to becoming robust technological platforms, which steal the attention of investors and venture capital. Many may still be wondering, but how did they achieve it? The answer can be summed up as they managed to use technology to make financial services available to anyone. Furthermore, they did so in an innovative and disruptive way.

Additionally, unlike traditional banks, fintechs have agile, flexible and rapidly scalable business models; and they have used this to their advantage to change not only the way financial services are offered but also the way they are consumed, without being tied to rigid structures, and in many cases obsolete.

One of the keys to their accelerated success is that they managed to understand customers’ needs and create solutions that responded to them. Thus, it relies on convenience for the consumer and makes it the center of the strategy. In this way, they have indeed created new and innovative systems. Still, it is also true that they have directed many of their efforts towards understanding the ecosystems that already existed and improving them.

Another card well played by fintech has been to choose strategic cities from the point of view of innovation, regulation and talent as the center of operations. Operating in large financial markets, but at the same time having the flexibility to become testing grounds for new businesses, has been key to exponential growth.

Fintech, The End of Traditional Banks?

Yes, fintech companies came to revolutionize the financial industry, and although traditional banks initially saw them as a threat, today they work collaboratively and have a common future.

After understanding that it was necessary to adapt to this challenging environment that fintechs were setting up, the banks decided to play by the same rules and begin developing their applications, creating small fintechs that operate in-company and, in some cases, invest and even buy fintech already created.

This symbiosis has worked out very well for both players. On the one hand, fintechs require the financial muscle that banks can command; At the other extreme, banks needed a digital transformation that would revolutionize their traditional models to adapt to the market’s new needs and win spaces to which they previously did not have access.

The Protagonists of Fintech

Many fintechs give something to talk about; selecting the protagonists can become a daunting task and even a little unfair. However, there are some names that, without a doubt, must be present in any list that talks about fintech.

  • PrimaryBid – helps retail investors improve access to public markets by pooling orders. And it accumulated a total of more than 50 million euros raised.
  • Eubank: a Brazilian neobank that closed 2021 as the best valued financial institution in Latin America. In 2021 it introduced the US $1,150 million.
  • Ebanx: A payments fintech with a global customer list of over 35,000. It recently closed a US$430 million round.
  • Robinhood: An American investment app, it has become known for offering commission-free trading of stocks and exchange-traded funds. In 2021, it managed to finalize a round of financing for the US $3.4 billion.
  • Klarna – Swedish payment platform that offers online financial services such as debt collection, credit payments and more. In February 2021, it managed to close an investment round for the US $1,000 million.
  • Bitso: Mexican platform to buy, sell and use cryptocurrencies. It grossed US$250 million in 2021.
  • Stripe: is an online payment system designed to be integrated directly into an online store’s website. He reached an agreement for the US $1,000 million.

What The Future Holds For Fintech

If the COVID-19 pandemic brought something positive, it accelerated the pace of companies’ digital transformation. This scenario opens up a field of opportunities for fintech companies, which can provide technological tools to companies to start up their electronic stores or other digital solutions necessary to meet their customers’ new demands. By 2022, the fintech financial revolution will continue, and some of the most relevant sectors will be:

The Fintech White Label

Fintechs have partnered with banks and other providers to purchase financial services, which the fintechs outsource. This has allowed fintech companies to cover many more benefits and companies that opt ​​for this type of white-label solutions to enter the market more quickly, reducing costs in terms of time and resources. For the next few years, this will be a model that will continue to give people something to talk about since it will allow companies, especially small and medium-sized ones, to maintain their relevance in the ecosystem in which they operate.

Voice Commands To Make Payments.

Thanks to virtual assistants, voice commands are becoming more and more an everyday thing, and the financial industry is no exception. Activating payments with the voice is one of the trends in which fintech will have more prominence, and that, in addition, will forever transform how banking transactions are carried out.

Financial Aggregators

Bringing together all of a person’s financial data and products and presenting them in one place in a summarized way is one of the biggest challenges fintechs face. Financial aggregators allow payments to be made from a single location regardless of whether services have been contracted with different financial entities; they also enable banks to have all the client’s information.


The size of the global blockchain market is expected to grow from $3 billion in 2020 to $39.7 billion in 2025. As the technology behind bitcoin and cryptocurrencies, many organizations have their eye on it. Without a doubt, it will. It is one of the most important trends of the moment. As it is a distributed and encrypted database model, it can solve many problems related to trust and online security. For this reason and many more, blockchain solutions will continue to be a safe bet for fintech companies, who will seek to make this system a little more ecological and integrate it with more familiar elements.

Banking will continue its transformation process, and, to a large extent, fintech companies will be responsible for it. Investor confidence in fintech shows that they are one of the industries with the greatest projection.

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