If you’ve heard the phrase fintech, it refers to the integration of technology into offerings by financial services companies in order to improve efficiency, accuracy, and convenience. Essentially, fintech takes activities traditionally performed manually and makes them digital.

The fintech sector has exploded in recent years thanks to smartphones, high-speed internet, the cloud, cryptography, and other modern advancements that allow for sophisticated innovations. These technologies have opened the door to online banking, automated investing services, decentralized cryptocurrencies, cashless payments, data analytics, and more.

The idea of fintech particularly aims to enhance the speed, security, access and experience of common consumer and commercial financial solutions. For instance, solutions include peer-to-peer transfers between friends splitting bills, automated budgeting and saving tools, alternative small business lending platforms, easy ways to make purchases via mobile payments, and applications to manage various accounts and investments in one dashboard.

Large banks, insurance agencies, audit firms, stock exchanges and other traditional players increasingly incorporate fintech internally by acquiring specialized startups, upgrading their digital platforms and working to keep pace with market demands. But smaller fintech disruptors have also emerged to directly challenge established industry practices. These include microinvesting apps, digital banks without physical branches, and decentralized finance services.

Governments additionally utilize fintech for tasks like collecting taxes online, distributing welfare benefits, holding auctions of public goods or monitoring large-scale public spending programs. Fintech increases oversight, efficiency and convenience across the critical financial structures that power the economy and government.

Looking ahead, fintech will underpin the ongoing digital transformation of finance. With open data access and continued tech innovations, the space promises to lower costs, increase speed and inclusion for underserved populations who still operate primarily in cash. It opens up more opportunities for consumers and small business owners alike when responsibly regulated. At its core, fintech puts the power of finance directly in the hands of people.