The word fintech is increasingly being heard in the media and conversations of IT professionals. The fact that this term is used often does not mean that its meaning is quite clear to many – even to high-tech experts and knowledgeable entrepreneurs. Because of what it happens that this concept is used out of place.
The new buzzword
Fintech is an area that is fundamentally changing our lives – both public and business. Fintech most often refers to new IT ventures (start-ups) that are shaking up industries such as mobile payments, money transfers, loans, fundraising – and even asset management. Start-ups use technology to offer financial services that are already available, as well as new, innovative solutions at a competitive price.  At the same time, the flourishing of fintech provides new opportunities for both consumers and entrepreneurs. Businesses can offer incomparably cheaper services, and choices in consumer financial services have never been greater than they are now.
Types of fintech enterprises, their development
Fintech businesses are most often associated with start-ups that start in industries traditionally dominated by banks and other financial institutions. But the term fintech also extends to tech businesses, traditional service providers, and many other market participants. At the global level, these are both large, well-known financial institutions and large technology enterprises (Google, Yahoo, Amazon, etc.) that operate in the financial services sector. These are enterprises that provide technologies that make financial transactions much faster and easier. Among them, there are enterprises that “disturb the calmness” – these are fast-growing companies (often start-ups) that focus on the latest technologies and processes.
Technological progress has given impetus to the development of many areas of fintech – for example, mutual lending, non-bank loans, deposits, accounting, personal finance, individual investments, crowdfunding, payments, research, financial consulting, even new currencies such as Bitcoin . In turn, in Latvia, the most popular fintech tools so far have been non-bank loans, crowdfunding, and transferring funds. Mutual lending platforms that bring together many lenders and debtors are also increasingly in demand. Until now, the ability to carry out such operations was limited, since the intermediary was the bank. Crowdfunding makes it quick and easy to get funding for an outstanding idea – from anywhere in the world and from people the recipient has never met. Sending money abroad, which has given entrepreneurs a lot of headaches in the past, is another area that innovators have completely changed. TransferWise has turned the problem of sending money abroad on its head: this traditional (and expensive) banking operation is now available to small businesses and individuals for much less money.  Non-bank loans are another such area: they are very common in Latvia, they can be obtained in a short time, and the procedure is simple, but requires responsibility.
The cornerstone of growth in the fintech industry is the development of information and communications technology, which has been extremely rapid over the past decade, and the opportunities provided by fintech. This, in turn, affects how people use their finances – how they transfer, receive, borrow, spend and invest.
Significance in the modern business world and perspective for the future
While nearly two-thirds of the world’s customers use fintech products or services, there are also those who are still loyal to traditional banks and the services they provide. Undoubtedly, both of them have certain advantages. Research has shown that the benefits of fintech include flexibility (the ability to immediately respond to changes in market demand), innovation and the ability to attract customers who are familiar with technology. Fintech services are used by those for whom speed, convenience, and ease of use are important. For banks, direct communication with people is important.
It is safe to say that this situation will not change and development will continue. Fintech has become the “new normal”. In the long term, financial institutions will have to make fundamental changes in their work: they must acquire the ability to quickly adapt to modern requirements and change the way they work. Most institutions are still trying to find and implement innovative ideas. In fact, they could learn from the troublemakers of the financial world. Now banks see them as competitors, although cooperation would be mutually beneficial.