Fintech, the portmanteau of finance and technology, represents the collision of two worlds—and the evolution of the use of technology in financial services. Financial services and technology are locked in a firm embrace, and with this union comes both disruption and synergies.
Financial institutions are engaging with fintech startups either as investors or through strategic partnerships. Almost 80 percent of financial institutions have entered into fintech partnerships, according to McKinsey Panorama. Meanwhile, global venture capital (VC) fintech investment in 2018 has already reached $30.8 billion, up from $1.8 billion in 2011.
“Fintech” covers a range of different models. We see four distinct variants, each operating in different niches, with different modus operandi.