Finance and technology are the two main pillars on which the modern economy is built, and when either of these is strong there is no way the economy can fail. The problem arises when the finance and technology sectors are weaker than the other sections of the economy. When this happens, businesses find it difficult to stay afloat because their overall profitability is lowered because the costs of doing business increase without an increase in profit. So this makes it very difficult for businesses to grow, thereby creating a feedback loop that ends up in a loss of jobs in favor of more automation and offshore business oriented ventures.
Fintech are a blend of technology and finance, and usually it is a broad classification comprised of businesses that apply new technologies to existing financial instruments. For instance, businesses that develop and operate computerized electronic payment processing systems are usually considered fintech. Likewise, those businesses that make, provide or manage consumer credit cards, loans, debit cards, and payments are also considered fintech.
The most popular example of fintech are the banking industry. Technological advancements in the banking sector such as ATM machines and debit cards have increased efficiency by allowing customers to complete transactions easier and more quickly, but also make transactions cheaper. Banking systems also include Internet services, such as online banking and mobile banking, that allow customers to access their accounts wherever they are, making transactions more convenient. Tech-savvy consumers are finding it more convenient to make payments, conduct direct deposit, and even transfer money from a foreign country through electronic transfers rather than walk into a bank and make the transaction face-to-face. Additionally, customers are also becoming tech-savvy in terms of their use of banking and financial products as well, which means that the need for banks to hire more tech-savvy employees is likely to grow substantially in the future.