What is the financial technology (FinTech)?

The National Digital Research Centre in Dublin, Ireland, defines financial technology as "innovation in financial services", adding that "the term has started to be used for broader applications of technology in the space – to front-end consumer products, to new entrants competing with existing players, and even to new paradigms such as Bitcoin".

FinTech refers to new solutions which demonstrate an incremental or radical / disruptive innovation development of applications, processes, products or business models in the financial services industry. These solutions can be differentiated in at least five areas.

First, the banking or insurance sector are distinguished as potential business sectors. Solutions for the insurance industry are often more specifically named "InsurTech".

Second, the solutions differ with regard to their supported business processes such as financial information, payments, investments, financing, advisory and cross-process support. An example is mobile payment solutions.

Third, the targeted customer segment distinguishes between retail, private and corporate banking as well as life and non-life insurance. An example is telematics-based insurance that calculates the fees based on customer behavior in the area of non-life insurance.

Fourth, the interaction form can either be business-to-business (B2B), business-to-consumer (B2C) or consumer-to-consumer (C2C). An example is a social trading solutions for C2C.

Fifth,the solutions vary with regard to their market position. Some, for example, provide complementary services such as personal finance management systems, others focus on competitive solutions such ase.g. peer-to-peer lending.