What is fintech?

- [Instructor 1] Fintech is the use of technology in the field of finance. One example of fintech is the use of banking apps on smartphones rather than physically visiting a bank. - Fintech also involves financial data being collected and transmitted automatically through sensors connected to the internet, say a sensor in the factory of a loan customer, to monitor production quantity. - Sensors confirming vehicle usage details for auto insurance purposes or grain quality in storage silos. Webcams monitoring foot traffic in retail shopping malls to help determine rental rates. - Fintech is artificial intelligence programs exploring vast quantities of big data to detect patterns, make forecasts, and design financial products specifically tailored to the needs of an individual customer. - Fintech is online markets matching investors with companies that want to borrow money or that are seeking additional funds from new owners. - [Instructor 2] Fintech is blockchain technology replacing the centralized databases of big financial institutions and storing cryptographically secure data on many computers in a network. - [Instructor 1] And speaking of cryptography, the highest profile example of fintech is cryptocurrency, an electronic currency that's not controlled by any centralized bank or government. - With many people spending lots of time isolated in their homes during the COVID pandemic, the growth of fintech was accelerated in 2020. - Now, do you have any personal experience with fintech? - Yeah, last year I experienced the flexibility that fintech can offer over traditional banking. - So, what happened? - Well, I wanted to send some money, a little gift to each of my children. - Well, there's no problem there. Just do some bank transfers. - Well, it didn't work. My bank restricted me to making only a certain dollar value of transfers each day. Sending the money to my children would have required making piecemeal transfers every day for a week. - So, what'd you do? - Well, I used fintech. In this case, I used a PayPal account that I'd previously connected with my bank account. - So, how did PayPal help? - Well, I was able to make all of the transfers in just five minutes. Five minutes instead of a week. PayPal took the money from my bank account and sent it to each of my children. - Okay, you used the flexibility of fintech arrangements to get around your bank's restrictions. - Yeah. Now, so, how about you? You're Mr. Technology. What about your fintech experience? For example, do you ever make payments using some kind of app on your phone? - Turns out I did. Just last week, I used Venmo to pay a gentleman who washed the windows on my house. I opened the app on my phone, put in the identifier of the person, pushed the button, done. - My wife, Ramona, uses that same procedure when she wants to reimburse one of our children for something they bought for one of our grandchildren. - Okay, do you have any personal experience with that fintech poster child, cryptocurrency? - Actually, I do, indirectly. A few years ago, one of my sons was a cryptocurrency minor. - Minor, what does that mean? - Well, we'll talk about that in our module on cryptocurrency. - [Instructor 1] Fintech is using technology to change the way we make payments, get loans, gather information to monitor the behavior of borrowers, and even store sensitive financial information. - Venmo, PayPal, cryptocurrency mining, big data, online loan markets. fintech is in each of our lives, and in many cases, we don't even know what it is.