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What is FinTech?

FinTech, is an amalgamation of two terms – finance and technology. FinTech is the over-arching term for any emerging technologies that delivers financial services in an effective and improved manner. FinTech has been around and can be traced back to the late 1800s and today, FinTech is used to help businesses and consumers manage their financial operations with specialized software and algorithms.

What is fintech? - Financial Institutions

FinTech started out as the technology powering established financial institutions, however, it has evolved and matured to become more consumer oriented.

There are several factors that helped to mature the FinTech industry,

  1. New technologies that help to fuel FinTech innovations – for example, Artificial Intelligence and Machine Learning)
  2. A surge in new funds invested into the FinTech firm as the outlook of FinTech industry is increasingly positive over the years
  3. Macroeconomic situation has been positive in several regions like Asia Pacific, UK, and US.

The FinTech industry accelerated due to the opportunities in un- and underbanked populations. By 2022, FinTech industry is expected to grow to $310 billion.

Subsectors of FinTech

What is Fintech? - Payments Technology

FinTech now encompasses a diverse catalogue of subsectors. FinTech firms now fall within one if not, overlap into a few categories. Companies are created to simplify or create a solution for financial-related cause. Here are some main subsectors of FinTech:


InsurTech (Insurance Technology) is defined by technology innovation designed to simplify or improve the efficiency of the current insurance industry model. InsurTech come in various applications, but its goal is to streamline and enhance backend processes which can in turn improve customer experience and cost efficiency. For example, Lemonade and Hippo allow consumers to find out what insurance they qualify for, eradicating the traditional face-to-face approach.


RegTech (Regulatory Technology) is meant by technologies that manages regulatory processes and challenges of the financial industry. RegTech is used in regulatory monitoring, reporting and compliance purposes. RegTech is typically used by companies or businesses in ensuring the compliance of regulations in an efficient and cheaper manner. RegTech rose in popularity due to the increase of digital product usage, which increases the risks of data breaches, cyber hacks, money laundering and any other fraudulent activities. Some examples of RegTech companies are Artic Intelligence, Know Your Customer and Tookitaki.


Payments is technologies that help to make a financial transaction with a digital device. One of the most common examples of payment technologies in play is the surge of contactless payments. Payment FinTech firms helps to process payments in a faster, simpler, and more secure manner. Some examples of Payment firms are Ripple, PayPal and Bolt.

Blockchain & Digital Assets

What is Fintech - Blockchain

Blockchain gained its popularity alongside with Bitcoin as the technology that was developed for Bitcoin. It is the technology that underpins Bitcoin and introduced as a secure bookkeeping method. Due to the characteristics of blockchain (secure and difficult to hack), many FinTech companies have utilized it to build their business on a transparent yet secure ecosystem. Digital assets like cryptocurrencies and alternative currencies made its appearance on the market soon after the popularity of Bitcoin. This accelerated the entry of several digital asset exchanges on the market like Coinhako, and more.

WealthTech & Robo-advisors

The application of WealthTech is most evident in the rise of robo-advisors. They are known as services that utilizes algorithms to automatically perform investment tasks that was previously done via a human financial advisor. Robo-advisors like Syfe, Stashaway and Nutmeg help to improve access to financial advice for retail investors. With its entry, it has helped to improve financial inclusion around the world.


Lending is usually referred to as FinTech technologies that develops a range of products/services to offer non-bank funding. It can cater to individuals and small-medium enterprises (SMEs) via crowdfunding, P2P lending and more. FinTech firms in the Lending subsectors are Funding Societies, Validus and Klarna cater to those group of people that are usually underserved in that area as they tend to be unable to secure financing from traditional banks.

Accounting Tech

Accounting Tech are technologies that are helping businesses manage their accounting, bookkeeping and tax services. Accounting Tech primarily helps to solve the pain points of accounting and make it easy and automated. Some accounting tech examples are cloud-based accounting, artificial intelligence accounting and blockchain.

Front/Middle/Back Office Tech

A financial institution is made up of front, middle and back offices. Front office is defined as the consumer-facing function which can typically be made up of administrative and sales team. Middle office is the department that manages risks, profits, and information technology (IT) that sits between front and back office. Back office is made up of administrative and support function that can include settlements, clearances, record-keeping, regulatory compliance, accounting, and IT.

Common FinTech applications for these offices are Artificial Intelligence (AI) and Blockchain. They help the three offices to integrate and streamline processes as the three functions work collaboratively in a financial institution. For example, AI allows for automate, simplification and perfect for dealing with large volume of information. This function deal with large volume of customer data and front office will be able to step into automate and simplify the front-end processes. AI allows them to use it for marketing and due diligence purposes and allow the middle office to pull up the data required. The huge volume of data and transactions recorded by back office often utilize the blockchain technology due to its unique characteristics to record large volume of records in a regulated and compliant manner.

Digital Banking

With more than 250 digital banks globally, banking is no longer limited to the governmental-regulated central banks that we used to know. FinTech in Digital Banking is the financial innovative technologies that are creating the future of banking with digitalization. Digital Banking is the shift of traditional banking to the availability of banking services online without a physical presence. FinTech contributes to digital banking with automation technologies and web-based applications which helps to provide an improved and efficient digital banking experience for both banks and customers.

Open Banking

Open banking allows third party financial service providers to access consumer’s financial data with Application Programming Interfaces (APIs). With the introduction of open banking in the FinTech industry, it has helped to shape the financial industry to become more collaborative, expand the FinTech product offerings and offer more customized services to consumers while helping banks improve their lending decisions.

Challenger Banking

Challenger banks are FinTech startups that are regulated and licensed by banking regulators to operate the traditional banking services, but they leverage on innovative technologies and with lesser physical presence. Serving the underbanked and improved convenience that allows consumers to perform their financial activities digitally, challenger banks has been proven to pose a potential threat to central banks.

The FinTechs We Know Today

FinTech is often characterized as a threat or disruption to traditional financial services. It helps to solve and improve financial solutions like serving the underserved (that traditional banks don’t usually cater their services to) or offer better services (that makes the lives of consumers easier).

Disruptors of FinTech

Payments Disrupting the FinTech Industry

Disrupting the market

As the usage for physical currencies have declined significantly, it is evident that the Payment subsector made a significant mark within the FinTech industry. Not only did it impact the consumer’s way of spending, but it also changed the way businesses operated and we witnessed the traditional banks quickly getting on it. Evidently, digital payment is a trend that is here to stay. It is estimated that by 2023, there will be 1.31 billion digital payment users globally. The Payment industry is one of the FinTech subsector that took the world by storm. Globally, it is a common sight to see digital payment being accepted as one of the common payment methods. The most popular digital payment methods are PayPal, Apple Pay and Visa.

As more FinTech firms are joining the race in FinTech, there is a significant rise in Payments FinTech firms. In Asia Pacific, the Ant Financial Group provides mobile payments and digital inclusive financial services worldwide. Based in China, the country with the largest population in the world, it played an important role in accelerating consumer technology adoption rate. With major payment players based in China, they took the lead in mobile payments adoption rate and market share without much effort.

Today, we see traditional banks keeping up with the trends and consumer habits by adopting digital payments into their offerings. With technology and innovation, FinTech firms like the Ant Financial Group have proven to disrupt how banks traditionally worked and forcing them to keep up with the competition. 

Blockchain Disrupting the FinTech Industry


Initially introduced as the underlying technology of Bitcoin, it has evolved into a technology that FinTech companies use as a decentralized ledger of transaction. With blockchain’s unique characteristics, it has disrupted and transformed several subsectors of FinTech.

Blockchain can disrupt the banking industry by disintermediating the key services that banks provide, from payments to clearance and settlement systems.

Payments are a huge part of banks’ operations, evident with approximately $224 billion in cross-border transactions of payments revenues in 2019. Blockchain technology provides a secure and cheap way of sending payments that eliminates the need for verification from third parties and reducing processing times for traditional bank transfers. By 2025, it is expected that blockchain will change the payments industry.

Blockchain-focused startups are looking to automate and secure financial processes more efficiently than ever. For example, by using blockchain technology in stock transactions online, it can help to integrate cryptographically secure distributed ledgers with existing trading processes to reduce settlement time and costs and increase transparency and auditability. In RegTech, blockchain can also help to store customer information on decentralized blocks. This provides a secure and easier way to share information across financial institutions.

Who are Storm2?

FinTech is a fast-paced industry that evolves extremely quickly. It is amazing how things have developed and matured over time. Storm2 are a specialist recruitment agency with a strong team of specialists that are trained and equipped with the necessary skills to identify the right candidate for an emerging FinTech firm’s success in an ever-changing landscape. Get in touch with us to find out more!