What is a fintech?

What is a fintech?

Digital transformation is changing many areas of our daily lives, from the way we work to how we manage our money. In recent years, the term fintech has gained prominence and has been occupying more and more space in the lives of thousands of Brazilians. Find out what a fintech is, its variations, advantages and more, below;

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The term fintech comes from the union of the words “financial” and “technology”, which summarize well the essence of the category. Briefly, fintechs are companies focused on developing technological solutions to financial problems. In case you are wondering, what is the difference between startups and fintechs, well they fit the description of startups, which seek to innovate in the market with low cost and scalability, but with the specificity of dealing with finance.

This type of organization differs from digital banks — financial institutions with 100% digital operation, due to the series of requirements necessary for a fintech to be considered a digital bank. Many join traditional banks to access some of these demands more easily, as well as offering more confidence.

In the market, there is a good diversity of services offered by fintechs, which include payment platforms; credit or loan; crowdfunding; cryptocurrencies, investments, financial control and much more. Some examples of financial startups are PicPay, C6Bank and Nubank — already considered a digital bank.

Among the benefits that fintechs offer are easy access to financial services, less bureaucracy, reduced cost — due to the lack of expenses with branches and physical points —, cutting-edge technology to solve problems, greater navigation power and agility in processes.

How to know if a fintech is reliable?

The Central Bank is the body responsible for overseeing services and companies, including fintechs. To find out if a company is true and reliable, just consult its CNPJ in the Central Bank database.