Module III·Article I·~1 min read
Fintech: How Technologies Are Reshaping Finance
Fintech and Digital Finance
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What Is Fintech
Fintech (Financial Technology) refers to companies that use technology to provide financial services. The broad definition covers: payment services, lending, investments, insurance (insurtech), wealth management (wealthtech), regulatory technology (regtech).
Waves of Fintech Innovation
First wave (2008–2015): Post-crisis — a crisis of trust toward banks opened the door for fintechs. Emerged: Stripe (2010), Robinhood (2013), Betterment (2010), TransferWise (Wise, 2011).
Second wave (2015–2020): neobanks (Revolut, N26, Monzo), P2P lending, insurtech. The banking experience is shifting from “branch” to “mobile app”.
Third wave (2020–): embedded finance, BaaS (Banking as a Service), DeFi (Decentralized Finance), AI-first finance.
Neobanks: Redefining Banking
Neobank (challenger bank, neobank) — a bank without physical branches, existing only in a mobile app. The model is different: no legacy IT infrastructure, no expenses for branch networks, user-first design, fast development of new features.
Examples: Revolut ($33 billion valuation) — 35+ million clients, multi-currency accounts, trading, crypto, insurance. Tinkoff (Russia) — 30+ million clients, super app. Nubank (Brazil) — 80+ million clients.
Monetization of neobanks: interchange fees (from every card transaction), subscriptions, credit products, brokerage, B2B (BaaS).
Embedded Finance
Embedded Finance — embedding financial services into non-financial products. Stripe Treasury allows any SaaS app to integrate bank accounts. Apple Pay Later, Shop Pay Installments — BNPL (Buy Now, Pay Later) in e-commerce.
The client takes a loan within a marketplace app, without knowing there is a partner bank behind it. “Invisible finance”.
Practical Assignment
You are launching a B2B SaaS for small business management. You want to add financial functions: (1) settlement account, (2) lending, (3) corporate cards. Using the BaaS (Banking as a Service) concept, determine: which providers can supply these services? Does your company need a license?
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