COMPREHENSIVE OVERVIEW OF FINTECH INDUSTRY: DEFINITIONS, EVOLUTION AND SEGMENTS

Abstract

The rapid growth of technology leads to drastic changes in almost every industry. One of the industries where technology has made a serious disruption is the financial services industry. When it comes to financial services and technology, special focus is put on FinTech industry. This paper seeks to present the significance of FinTech industry as a way of providing innovative and modern financial services by using technology. The paper includes a comprehensive overview of FinTech industry stressing the core segments of the industry. Firstly, the paper examines the term FinTech and its popularity over the past few years. Along these lines, note is taken of a number of definitions which point out to the importance of FinTech. In that context, the scope of the FinTech industry is presented with the aim of identifying the players on the FinTech market. Secondly, the analysis continues with an examination of the rapid evolution of the industry. Concurrently, the history of finance and technology is briefly presented, whereby some of the most important technological innovations in terms of finance are mentioned. Thirdly, the paper spells out the characteristics of FinTech companies. Along these lines, the paper highlights the main characteristics of FinTech start-ups. Fourthly, the growth of the industry is substantiated by facts and figures. Namely, FinTech development in the main markets of the industry is explored. The most popular regions concerning FinTech activities are also underlined. Finally, the paper elaborates on the segments of FinTech industry, including various types of classification used by different authors. The most significant segments of FinTech industry are explicitly presented. The profound theoretical analysis indicates that the term FinTech is a coin term from financial technology referring to new and innovative financial technology providing financial services. The use and popularity of the term FinTech is particularly emphasized in the last few years. The evolution of FinTech industry is in its peak and its growth will continue in the future. At the moment, there is talk of three evolution stages, but a fourth stage is also being announced to come soon. FinTech can mainly be described as innovative, flexible and scalable which are their main features. Also, growth of investments in FinTech industry had been fairly constant until the year of 2014, and what followed was their rapid growth over the next years. When it comes to the segments, FinTechs tend to revolve around financial services in payments and lending areas. Moreover, the most progressive FinTech companies are mainly found in strong and well-regulated markets, to illustrate the USA, the UK and China. The final conclusion would be that FinTech industry has significant effects on the financial services market by providing new, cheaper and faster services for consumers and businesses.