The evolution of technology-related information stimulates strong product and business model innovation in many sectors of the financial industry. FinTech concerns the digitization of the banking and financial system, which uses technology to make the system itself more efficient. In particular, the term FinTech is generally used to refer to financial innovation made possible by technological innovation, which can result in new business models, processes, or products, as well as new market players. The nature of the relationship between technological innovation and financial intermediation is the subject of further study; the changes taking place in the financial services markets, driven by technology, have a very profound strategic significance.
FinTech, an acronym of the first syllables of FINancial TECHnology, is the segment that encompasses companies that provide financial products and services through new digital technologies. These companies are typically start-ups, i.e. companies that have just been formed or have been in existence for a short time and whose objective is to innovate existing traditional services.
FinTech companies are active
Many institutional giants are investing more in innovation, in some cases, or seeking integration with FinTech companies, in other cases. Opening up early to innovation, for large traditional institutions, is important in order to avoid competition from FinTech companies and to counter the threats that may soon come from large international digital companies, which already have a large and profiled customer base through their activities.
Online trading is the buying and selling financial instruments (shares, bonds, certificates, ETFs, etc.) via the Internet. It was born in Italy in 1999, when the ‘Nuovo Regolamento Consob di attuazione del Testo Unico dei mercati finanziari’ regulated its aspects.
The advantages of using this type of online service are:
Crowdfunding is the raising of venture capital through online portals.
Crowdfunding (from the crowd – crowd and funding – funding), or collective financing in Italian, is a collaborative process of a group of people using their money in common to support the efforts of individuals and organisations. It is a bottom-up microfinancing practice that mobilises people and resources.
The primary forms of crowdfunding are as follows:
Lenders, also called peer-to-peer lenders, are private citizens or companies belonging to the European Union who decide to invest their money within peer-to-peer lending platforms.
To be able to lend money to others, you have to register on a platform, transfer the sum to be invested and select the loans you want to finance.
Applicants, also called peer-to-peer borrowers, are private citizens or companies belonging to the European community who have applied for peer-to-peer loans through a social lending platform.
After uploading its data into the system, the platform assesses the applicant’s financial strength and, if positive, offers the loan to investors. In recent years, the market has exploded, and more than 350 platforms in Europe now specialise in providing peer-to-peer lending services. Some platforms are regulated by supervisory authorities, while others are unregulated. In Italy, for example, they are authorised by the Bank of Italy, but they can sometimes operate abroad without any licence.