fintech technology

What Technologies Contribute to Fintech?

Estimated read time: 10 minutes

FinTech” stands for “Financial Technology”, and it has unleashed a wave of innovations in the banking and financial services sector. The following are the fintech technologies:

1. Cloud computing: The enabler among fintech technologies

Cloud technology has enabled the fintech revolution in the following ways:

  • Cloud computing has lowered the entry barrier for fintech start-ups. They don’t need to invest in expensive data centers to roll out new financial services and products.
  • Traditional financial institutions and banks can reduce their IT infrastructure costs due to cloud computing.
  • Cloud technology enables the financial industry to innovate at speed and scale. Cloud computing makes them more agile.
  • Leading managed cloud services providers (MCSPs) continuously strengthen their cloud security solutions. Financial services companies and banks can focus on innovation since MCSPs manage cloud security.
  • MCSPs offer excellent tools for orchestration, cloud provisioning, monitoring, scaling, DevOps, storage management, etc. This enables fintech start-ups and established financial institutions to focus on product development.
  • Financial data management is key to the success of many fintech companies. They can use cloud computing to great effect for this.

Fintech companies can’t depend exclusively on the public cloud or private cloud. They are actively pursuing a hybrid cloud strategy.

2. Web technology: Helped to bridge the distance between consumers and traditional financial institutions

Blockchain, AI, IoT, big data, analytics, and several other technologies often dominate discussions about fintech technologies. However, fintech isn’t new. It existed before these technologies emerged. When consumers logged into the Internet banking website of their bank instead of visiting branches of the local banks, they used financial technology.

Good old web technologies made Internet banking possible. Even today, a growing number of consumers are accessing retail banking services via Internet banking. An Allied Market Research report estimates that the global online banking market will grow from $11.43 billion in 2019 to $31.81 billion by 2027.

Online banking helps traditional banks cut down on operational costs. Python, Java, JavaScript, Django, etc. remain valuable for online banking. Web technologies are also used in other fintech use cases like stock trading, cryptocurrency trading, etc.

3. Mobile technology: Brought banks and financial institutions to the palm of consumers

While web technologies enabled consumers to access banking and investment management products and services from their homes and offices, mobile technology brought these to their palms. Mobile technologies left the following marks on the banking and financial services space:


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  • Most consumers in matured markets now access mobile banking services. A growing number of consumers do that in the emerging economies too. An Allied Market Research report estimates that the global mobile banking market will grow from $715.3 million in 2018 to $1,824.7 million by 2026.
  • Mobile payment apps provide great convenience to consumers. An Allied Market Research report projects that the global mobile payment market size will grow from $1.48 trillion in 2019 to $12.06 trillion by 2027.
  • Mobile wallets made financial transactions easier for consumers. According to a Cision PR Newswire report, the mobile wallet industry will grow from $101.2 billion in 2020 to $750.3 billion by 2028.
  • Consumers can use stock trading apps like Robinhood for convenience.
  • Budgeting and personal financial management apps like Stash help consumers invest in financial markets.
  • Crypto exchanges like Coinbase offer mobile apps for consumers to trade cryptocurrencies.

4. Artificial Intelligence (AI) and its capabilities like Machine Learning (ML) and Robotic Process Automation (RPA): Helped fintech companies to offer “intelligent” products

AI and its capabilities like ML, RPA, and natural language processing (NLP) made wide-ranging contributions to the growth of fintech. The following are a few examples of how the financial sector is using AI and its subsets:

  • Robotic process automation (RPA) helps traditional banks and financial services institutions to optimize their financial processes and reduce costs. They can optimize manual processes like spend reconciliation and payment authorization.
  • AI and ML-powered robo-advisors act as financial advisors to retail and institutional investors.
  • Algorithmic trading uses AI and ML for efficiency.
  • Banks and financial services institutions use AI, ML, and NLP to extract actionable insights from vast unstructured data sets.
  • AI and ML can help financial institutions offer tailored offers to customers that fit their needs. They use AI and ML for user behavior analysis.
  • Upstart, an AI-powered lending platform uses AI to assess creditworthiness.
  • Banks and financial institutions use AI and ML to identify and mitigate cybersecurity threats.
  • AI and ML help banks and financial services companies to prevent fraudulent transactions.
  • Fintech companies use AI and ML for personalized portfolio management for their customers.
  • Banks and financial services companies use AI-powered chatbots to provide better customer service.

5. Internet of Things (IoT): Making new generations of financial products “smarter”

IoT offers a range of opportunities to fintech businesses. These are as follows:

  • Banks and financial institutions can use IoT to track the device used for committing a financial crime. They can also track the location where the crime is committed.
  • Fintech companies, banks, and financial services institutions can use data gathered by IoT systems to “train” their virtual assistants better. This helps them to provide better customer support.
  • IoT solutions will work in conjunction with AI to help consumers carry out financial transactions by voice and facial recognition. That’s easier for consumers than using cash or credit cards.
  • Banks and financial institutions can use IoT solutions in conjunction with AI to track past transactions and consumer behavior. This helps them to identify suspicious consumer behavior, and they can prevent fraud.
  • Fintech businesses can collect vast amounts of data using IoT systems. By using AI/ML and analytics, they can gain actionable intelligence from this data.

Note: At the time of writing this, experts in the IoT space are working to resolve some of the privacy and security challenges that exist with respect to IoT networks. Solutions to these challenges will expedite the adoption of IoT in fintech.

6. Blockchain technology: Allowing financial institutions to eliminate intermediaries, enabling decentralized finance (DeFi)

A discussion about blockchain technology in the fintech space focuses more on cryptocurrency trading. However, blockchain, or “Distributed Ledger Technology” (DLT) has much more to offer to fintech. A few examples are as follows:

6A. Global payment

Ripple uses blockchain for expediting global payment transactions. XRP is the digital currency on this network.

6B. Stablecoins

Stablecoins provide price stability. The crypto market is volatile, and volatility adversely impacts crypto adoption.

Stablecoins are examples of DeFi (decentralized finance). A stablecoin is a digital currency like Bitcoin or Ether, however, it has price-stability mechanisms embedded. It might be pegged to a fiat currency like USD or precious metal like gold.

6C. Decentralized crypto lending platforms

Decentralized crypto lending platforms are examples of DeFi too. They help borrowers get loans where banks don’t lend.

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Banks and traditional financial institutions must follow stringent processes before they can disburse loans. These processes can be hard to execute in several regions, therefore, borrowers there don’t get loans from banks.

Decentralized crypto lending platforms like Aave use technological innovations to bring lenders and borrowers together. Smart contracts and secure blockchain transactions help lenders to assess the viability of loans. Blockchain makes the lending process efficient.

6D. CBDCs (Central Bank Digital Currencies)

A central bank in a country has the monetary authority to decide monetary policies. Many central banks don’t accept cryptocurrencies as legal tenders. However, they are keen on creating a blockchain-based version of their country’s currency. These are called CBDCs, and they will likely leave a lasting impact on economic activities.

7. RegTech (Regulatory Technology): Enabling the fintech sector to comply with regulations

RegTech refers to the use of emerging and advanced technologies to meet regulatory requirements in the financial industry. The banking and financial sector needs to comply with many existing regulations, furthermore, new regulatory requirements do emerge. RegTech involves monitoring and reporting of the financial processes so that banks and financial institutions can comply with regulations.

RegTech solutions intend to monitor financial activities in real-time. They analyze consumer behavior and identify suspicious activities. RegTech intends to mitigate risks of data breaches, cybercrimes, money laundering, and frauds. RegTech companies use the following technologies for this:

  • Cloud computing;
  • Big data;
  • Analytics;
  • AI/ML.

They might use data from past failures along with data gathered from real-time monitoring to identify suspicious transactions.

8. Big data: Enabling the financial services sector to manage its data

Big data is key to the success of fintech. Big data platforms must process massive data sets in real-time, and the data might be available in various formats. The massive volume of structured and unstructured data in the banking and financial service industry makes big data crucial.

The fintech industry uses big data for the following purposes:

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  • Creating client segmentation strategies based on customer data;
  • Detecting and eliminating fraudulent transactions;
  • Better risk management;
  • Providing data for “training” AI chatbots for improved customer support.

9. Analytics: Providing actionable insights to the financial industry

Fintech businesses often use big data, analytics, and AI/ML together to gain actionable intelligence. It helps them in the following ways:

  • Fintech companies can create better customer segmentation strategies.
  • A better financial analysis enables fintech companies to create better-targeted offerings.
  • Analytics, big data, and AI/ML help fintech companies to create better cybersecurity solutions.
  • Fintech companies improve risk management processes with the help of analytics.
  • Robo-advisors depend on analytics for decision-making.
  • Banks and financial institutions use analytics to “train” AI chatbots for customer service.

10. Security technologies: Improving the trust of consumers in financial institutions

Banks, financial institutions, and other fintech companies utilize a host of technologies, approaches, and solutions to secure their business. Broadly speaking, they include the following:

  • AI/ML: To identify emerging security risks and mitigate them;
  • Multi-factor authentication (MFA): To reduce dependency on passwords;
  • Biometrics: To accurately identify customers;
  • Data encryption: To prevent hackers from reading data;
  • Digital signatures: To authenticate consumers;
  • DevSecOps: To prioritize compliance and security in the development and testing processes;
  • API security: This includes secure gateways, authentication, etc.;
  • Better software engineering practices: To mitigate application security vulnerabilities.


We reviewed the key fintech technologies. Hire developers from DevTeam.Space to execute your fintech project successfully.


1. Which key trends will mark the future of fintech?

The key trends in the future of fintech will be as follows: the spread of the “Fintech-as-a-Service” model, the growth of mobile banking, the spread of mobile payments, central banks rolling our CBDCs (central bank digital currencies), the growth of DeFi, and the spread of embedded fintech.

2. Which are the key examples of fintech products and services?

Prominent examples of fintech products and services are as follows: mobile banking, mobile payments, cryptocurrency trading, decentralized crypto lending platforms, stock trading apps, personal finance apps, robo-advisors, “InsureTech”, and algorithmic trading.

3. Do fintech companies use artificial intelligence and machine learning for cybersecurity?

Fintech companies extensively use AI and ML for cybersecurity. AI and ML-powered tools help them to identify emerging cybersecurity threats and respond to them. Furthermore, banks and financial institutions use AI and ML for fraud detection and risk management.

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