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financial technologyThere was a time where finances and technology were separate, like church and state. If you needed money, you went to the bank. If you wanted to play games, you used a machine. But now, there is fintech: The marriage between finance and technology. Here’s what financial technology means for your future.

What Is Fintech?

Financial technology launched as a means of improving financial services, like those at banking and investment institutions. But now, fintech encompasses a wide variety of services and products. It’s the convergence of business, finances, and technology.

Where once you’d you’d visit a bank to check your account or handle money matters, you then went online to your bank’s website. Now there’s an app for that. That’s fintech.

The Internet, and then the emergence of smartphones, propelled fintech into just about every home. It no longer exists just for those with have access to certain financial services.

Where Does Fintech Exist?

financial technologyYou probably interact more with financial technology than you realize. Financial technology is almost all-encompassing. For instance, it’s hard to keep in touch with financial institutions without technology.

Sending and receiving money 

Maybe when you were younger, an older relative sent you cash or a check in the mail. Then you went to the bank — in person — to deposit it. You completed a deposit form, stood in line, and then spoke with a bank teller who handled your transaction. This all happened during normal banking hours.

Now, you can send and receive money straight from your banking app. If you happen to get a check, you can take a photo of it and deposit it from your phone. Cash still exists, but it takes a trip to the bank to deposit it. There are drive-thru ATMs to avoid the line inside, but modern banking apps make the trip unnecessary.

Tracking bills, expenses, and income

There was a time where people would get your paycheck on Friday, deposit in the bank, and then write checks for your bills, stuff them in envelopes, slap on a stamp and put them in your mailbox. How long did this take?

Too long. Now, you can get paid through wire transfers or direct deposit — a deposit straight into your bank account without you making a bank trip. You can automate your bills to make payments at the same time every month. This means your won’t be subjected to late fees since your payment is automatically deducted from your account.

You can track your income and expenses, giving you easy access to making sure you’re only spending what you have. A long time ago, you’d get a list of account transactions every month. Now, you can check your transactions anytime you wish, from as many banks or credit card issuers you have.

Fintech also brings banking to underserved communities, which might not otherwise have access or tools to get to a traditional bank or institution.

Checking Credit

What did we do before we could check our credit scores and credit reports online or swipe through an app?

Now, it’s commonplace to check your credit through online banking websites, your credit card issuer, or other apps — all for free. You can also get your credit report online through AnnualCreditReport.com for free once a year.

Being able to quickly check your credit score gives you the chance to make sure your history is accurate. Also, if you need to borrow money or apply for credit, you can see if you qualify before applying.


If you were never familiar with investing, especially for retirement, it’s because you didn’t have the tools in place to get started and maintain a portfolio. It’s not really your fault. There’s a chance you didn’t know where to look.

Now, investing apps are en masse. Everything from online brokerages like Robinhood to robo-advisors like Betterment. Robo-advisors make investing easy for the hands-off investor. If you know the importance of investing but aren’t well-versed in analyzing stocks and other securities, you could use a robo-advisor.

Even fees on things like commissions and trades are no longer a barrier to investing. <any accounts have moved to free commissions and trades. Along with that, a number of companies don’t have a minimum deposit requirement. Or if they do, it’s a very low amount.

Finding Insurance

Whether you’re looking for a new policy or comparing your current one to what’s out there, you can do that fairly quickly with fintech. You can browse through insurance offerings on auto, home, life, and other types of insurance policies.

In fact, many insurance companies will allow you to compare your current policy to those out there. Or you can use a quote-only site, like The Zebra, to compare offers.

The Growth of Financial Technology

The marriage between finance and technology isn’t only for consumers, although that’s a big chunk of the target audience. But different companies exist for different reasons. There are also financial technology companies for banks, bank clients, and other businesses.

How you use fintech depends on your needs and purpose. If you’re looking for a personal loan, you might use a site to compare all your prospective offers in one place, rather than each individual personal loan lender. If you own your own business, you might use software to track your employee payroll and hours. You might belong to a bank that’s looking to increase the ease of using the app and website.

The Bottom Line

financial technologyAs the fintech world expands, financial technology will pit consumer demands against regulation of products and services.

While automation has catapulted fintech, regulation is still slow to catch up. Many fintech companies see a problem that needs fixing, but it doesn’t mean that laws in place allow those solutions to take place. Sometimes, companies are created faster than regulators can monitor.

Tips for Using Fintech

  • If you’re struggling to understand the relatively new fintech world, you might need to talk to a financial professional. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • When you sign up for a new app, you’re handing over personal and private information. While it might make your life easier, it doesn’t make it safer. As you start to use the tools in place that are there to help you, make sure to learn and understand how they are using your personal data. Know that data breaches and hacks are now common, from retailers like Target to credit bureaus like Equifax. Protect your privacy with SmartAsset’s tips for online financial transactions.

Photo credit: ©iStock.com/courtneyk, ©iStock.com/ridvan_celik, ©iStock.com/FG Trade

Dori Zinn Dori Zinn has been covering personal finance for nearly a decade. Her writing has appeared in Wirecutter, Quartz, Bankrate, Credit Karma, Huffington Post and other publications. She previously worked as a staff writer at Student Loan Hero. Zinn is a past president of the Florida chapter of the Society of Professional Journalists and won the national organization's "Chapter of the Year" award two years in a row while she was head of the chapter. She graduated with a bachelor's degree from Florida Atlantic University and currently lives in South Florida.
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