Fintech is a broad term for a wide array of financial technologies that are disrupting the finance world for the better.
This week, Lendistry CEO, Everett K. Sands is taking part in the LendIt Fintech Conference in San Francisco, discussing how lenders can help small businesses in underserved communities, so what better time to define and discuss fintech?
What is fintech?
If you’ve heard the words cryptocurrency, blockchain, insurtech, crowd funding, unbanked, or even online application, these all fall under the fintech umbrella. According to Investopedia, fintech is, “any innovation in how people transact business…. Since the internet revolution and the mobile internet revolution, however, financial technology has grown explosively, and fintech, which originally referred to computer technology applied to the back office of banks or trading firms, now describes a broad variety of technological interventions into personal and commercial finance.”
Okay… but what does that actually mean?
It’s hard to define fintech simply because it is constantly changing. New applications make new things possible all the time, so today’s definition may be obsolete tomorrow.
How does fintech benefit small businesses?
The ambiguous definition of fintech is a good thing. Because of this constant shake-up, large, entrenched financial institutions that made it hard for many small businesses to get the finance they need to grow are becoming less necessary.
Fintech opens up access to the data and resources that large, traditional banks once enjoyed exclusively. It also opens up access to data and capital that were closed to many local community banks after the banking crisis of 2008. This makes it possible for small business owners who have been rejected by traditional banks to access the capital they need to grow. It also allows for innovation at smaller lending firms, from which small business applicants benefit.
How does Lendistry use fintech?
Just having an online application for financing is fintech. We can reach any business owner anywhere in the country and offer them small business loans. They are no longer reliant on going in person to a bank.
Here at Lendistry we have our own proprietary fintech. Our online application portal (MyLendistry.com) allows clients to apply online, and they can even opt to link their bank accounts to access documents for faster application completion. The application process can even be started on a smartphone or other mobile device. This makes the process faster and more widely accessible, and we are all about more access for more small business owners.
While fintech can sometimes sound like an abstract buzzword, it is the key to opening doors that were previously closed to small businesses owned by women and minorities, or businesses that need smaller amounts of money to take the next step.