Fintech products are quietly shaping everything from the way we do business to the way we buy our favorite things. Everyday, a wide variety of fintech products hit the market to help streamline our busy lives — always aiming to make things easier.
Think back to how finance was just a few decades ago, before the internet. You were required to physically go to the bank to withdraw money and you also needed to balance your checkbook. Today, we rarely set foot into an actual bank branch (except to hit the ATM, perhaps). We now have the technology literally in our hands to check balances, transfer cash, pay bills, invest in the stock market, and even apply for credit cards.
Innovative finance injects modern technologies in order to transform into financial technology, also known as fintech. Fintech is a broad umbrella term for many different programs and practices but it lets companies embrace the world of digital finance.
Instead of having to head to the bank to perform a transaction, you do that in the palm of your hand with a few taps on a smartphone thanks to fintech. As society moves towards an increasingly digital world, fintech is only growing in its relevance. With embedded financial products, non-financial companies and brands can offer financial products to their customers.
There are swarms of fintech products hitting the market every year. We see the headlines announcing gargantuan funding rounds and insane valuations creating new unicorn companies. Those that don’t adapt to these new technologies may find themselves getting left behind in the market and losing out on recognition, customers, and, ultimately, revenue.
There are many advantages of brands and banks working together to bridge notable gaps such as for communities that are often underserved or unserved entirely by our current financial system. Decreasing the costs of financial services and increasing flexibility per transaction are just two key examples of this teamwork. Fintech products enable customers to access more features through payment-on-demand options, lending, insurance, and other resources. This is just the tip of the iceberg of the financial inclusion that fintech products create and companies need to capitalize on this fintech opportunity.
Types of fintech
Fintech is a broad term that refers to various technologies in the financial sector and, as one may imagine, there are multiple types of fintech. The types of technology needed for finance will vary from business to business with embedded banking technology as the fastest-growing genre of fintech.
As fintech technology continues to push the envelope, businesses can utilize services that were previously reserved solely for banks and financial institutions. Fintech used in this way allows businesses to lend money and finance big purchases all in one place. Additionally, certain companies are now able to institute Buy Now Pay Later (BNPL) and other delayed or tiered forms of payment.
While such offerings may not be new, embedded financial products make these services more accessible than ever. The most common example of fintech in banking is through the ability to provide ATM access and actual bank accounts attached to debit or credit cards to communities.
Though these integrations may seem complex with many moving parts, companies like Bond offer end-to-end software to assist in the process. Brands can accomplish things like initiating or canceling ACH transfers, launching financial disputes, and issuing, activating, and closing virtual cards all while also collecting a tremendous amount of data on customers and making products tailored to them and their needs.
Fintech products and services
There are numerous types of fintech products and services for you to use in order to grow your business. The benefits of fintech for banks is also staggering as they are able to partner with more brands. There is usually a lengthy integration and launch time-frame — usually between 18-24 months — when running through the traditional set up process.
Banks collaborating with fintech can streamline basic processes and can make completing transactions more efficient for all parties involved. Fintech app features also make it easier for customers as they no longer have to look for cash or enter their card details for each purchase; their payment details are saved once and continuously reused by simply tapping a few buttons.
By making it easier for customers to make purchases both large and small, banks and the companies they partner with via financial technology both win. The facilitation of easily building deposit accounts and securely storing, spending, and sending money isn’t unusual but being able to do it outside of a bank is.
Deposit accounts can be opened with nothing more than a few lines of code. By using fintech, companies can now securely build accounts for customers to use. These can be done with all the perks of a brick-and-mortar bank like early access to funds and mobile deposits. You can also monitor spending for staying on budget as well as deciding to either charge or waive interest fees — all of this technology is at your fingertips.
Other services that can be included with account products are:
- Early paychecks: Companies can offer access to an early payday to their customers. They can do this by making funds available based on future payments, like their direct deposit.
- Mobile check deposit: Mobile check deposits are expected by customers these days. Mobile check deposits allow customers to add to their funds with ease.
- Availability: Gain access to a myriad of ATMs that are surcharge-free.
In seconds, you are able to create unique credit and debit cards for your customers and fintech makes customizing, activating, and sending your cards to customers straight-forward and simple. Through APIs, the process for issuing virtual and physical cards is effortless while utilizing the global networks of Mastercard or Visa. Additionally, they offer automated processes that make it easy to prevent and resolve fraud and disputes all while allowing you to make and manage a unique card and statement design.
Credit and charge cards allow businesses to reward loyalty and foster trust in your brand from your customers. Companies are able to gather data and use it to give back to their customer community by creating offerings that are tailored to them.
Some key additional services for credit products include:
- Risk management and underwriting: The process of building a credit policy, assigning credit line sizes, and repayment schedules get streamlined.
- Capital: A network of lending partners and banks that offers low-cost capital to fund credit products.
- Servicing and repayment: Repayments are available in daily, weekly, or monthly options.
Fintech products for banks
There is a difference between fintech and banks. Fintech is computer programs and other technology used to support or enable banking and financial services; a bank is a financial institution licensed to receive deposits and make loans while also providing financial services such as wealth management, currency exchange, and safe deposit boxes. Fintech products in the banking industry helps banking be more efficient. Beyond this, the term fintech can sometimes get confused with embedded finance. It’s important to distinguish between the two because embedded finance refers to when non-financial companies offer their customers access to credit or debit products through their technology platform and fintech in the banking industry, on the other hand, is a service for financial institutions themselves.
Fintech banking examples include:
- Credit tools: Fintech allows you to create virtual and physical cards for your customers in seconds. It’s easy to customize and send both digital and physical cards by using the networks of Mastercard or Visa. In addition to being PCI compliant, this also allows businesses to create their statements, decide on their fees, and more.
- ACH and wire transfers: Tools that make the movement of money efficient. ACH and wire transfers are now transferable on the same day to external accounts.
- Know Your Customer (KYC): Banking regulations require that financial institutions perform a KYC process to verify a customers' identity before they can use their accounts.
- Know Your Business (KYB): This process is a critical step where you validate the identity of your business customers and their documents to ensure that they're compliant with federal regulations.
As society continues to move towards a cashless system, keeping up in the world of financial technology will become increasingly important.
There are numerous examples of fintech and types of fintech companies, especially since fintech is such a broad term — think of companies like Chime, Klarna, or BlockFi. The best fintech apps and the top fintech companies utilize this financial technology seamlessly. Below are some fintech examples.
- Money movement: Fintech can make money movement more manageable. Complex matters like bank transfers, ATM access, and check deposits can be managed more conveniently.
- Card management: Cards are now created in just a few clicks. Businesses can create, issue, close, and reissue virtual and physical cards. Businesses can choose between receiving them as a credit or debit card. Operating on Visa and Mastercard networks translates to virtually anywhere accepting them. Companies also can have the ability to personalize the rewards associated with the card along with a host of other benefits.
Having gone over the benefits of utilizing fintech, the natural next question may be simple: “What fintech applications should my business use?”
The right choice will come down to the specific needs of your company, as there are countless fintech apps on the market. It’s important to make sure to research carefully and choose correctly; looking through many fintech applications examples, it’s easy to feel lost.
The best place to begin your search is with a trusted company like Bond. Bond hosts a multitude of fintech solutions that bring businesses and banks together. Founded by industry veterans, Bond inspires remains poised to be a leader in the industry.
Using Bond, businesses can deeply integrate banking systems into their everyday practices. This allows customers to have greater access to the products and services they offer. Easier access could mean a higher rate of conversions for your business as a whole. With fintech platforms like Bond, users can build a wide range of financial services within a unified platform. Bond is building the future of financial networks, allowing non-financial companies to offer financial products to their customers.
With a secure bank-agnostic system, Bond offers a full-service banking system. Regardless of which solution you choose, this feature could be among the most valuable of all.