20 Most Commonly Used Fintech Terms
Fintech, short for financial technology, is the industry most of our internet-dependent generation has come across in one way or another. From e-payments to cryptocurrencies, fintech has brought a revolution within the financial industry because of its digitized alternatives to traditional financial and banking processes.
With the popularity of fintech reaching even the hidden corners of the planet, there has been a downpour of new fintech terminology that seems to be adding new jargon every day.
Here is a list of 20 most commonly used fintech terms and abbreviations:
AI
Artificial Intelligence is an advanced technology that uses data to create digital solutions. Inspired by the human brain, AI simulates the workings of the human brain into machines to build machinery that mimics human behavior, interprets decisions, solves problems, etc.
AML
Anti Money Laundering encompasses everything associated with money laundering issues in the digital space like processes, regulations, institutions, etc. With the rising power of technology and digitized services, there has been an upsurge in data and cyber security issues, which has prompted the origination of terms like AML.
API
The Application Programming Interface can be defined as the language between applications, allowing communication and data transfer between different applications. Through this technology non-financial organizations can help provide fintech solutions to financial institutions, like online banking, e-payment portals, etc.
BigTech
BigTech comprises companies like Meta, Google, IBM, etc., that constitute immense power and influence over the global economy, data, etc.
Blockchain
Blockchain is the decentralized ledger technology through which cryptocurrencies and decentralized finance work. Blockchain is the framework that supports the functionalities of cryptocurrencies and stores and documents all activities.
BNPL
Buy Now, Pay Later is an instant credit service offered by merchant websites, which allows people instant credit at the point of sale. When a person opts for the BNPL option, the third party pays the merchant on behalf of the buyer on the pre-set condition that the buyer pays the amount back in easy installments at a later stage.
Cloud Computing
Cloud computing is the technology that provides digital storage and space for organizations and individuals to store, access, and work on different applications, computing tools, software, etc.
Crowdfunding
Crowdfunding is when several individuals fund a new startup or business in its initial phase. By using the applicability of the internet, new startups can seek small capital funding from a large mass, which would eventually make a big consolidated sum.
Cryptocurrency
Cryptocurrencies are decentralized virtual currencies based on blockchain technology that uses cryptography to monitor their security and creation.
DAM
Digital Asset Management is a set of ways, tools, processes, etc., used for managing, securing, buying, and selling digital assets. DAM technologies are gradually gaining ground with the growing popularity of cryptocurrencies.
Embedded Finance
Embedded finance is the adjunction of financial services to non-financial platforms, which allows customers point-of-sale financial options, like e-payments for subscriptions, etc.
FaaS
Fintech-as-a-Service is that stream of fintech which supplements the alliance of non-financial organizations, individuals, etc., to attain fintech capabilities.
IaaS
Infrastructure-as-a-Service is a cloud computing sub-division that enables companies to offer digital infrastructure and spaces to other companies to set up their online businesses and functions.
InsurTech
Insurance Technology involves technological solutions surrounding the insurance industry. With countless insurance options and services now available in the market, it becomes impossible for consumers to identify and select the service most suitable to their requirements. InsurTech regulates the insurance industry to make it more efficient and feasible for the customers.
NeoBank
Neobanks are digital-only banks that have no brick-and-mortar branches. These banks have been created specifically for the new-age technologically-backed world where all banking and financial services are provided online through their websites and mobile applications, engaging minimal paperwork and offering secure banking services.
P2P
Peer-to-peer is the term most commonly used for lending, where digital platforms allow individuals to ask for and lend money to each other. Such platforms, are independent of banks, providing more freedom to individual borrowers and lenders.
RegTech
Regulation Technology is that branch of technology focused on the regulations, standards, and compliances involved in streamlining the fintech space. RegTech is rapidly gaining more importance in the international and national fintech markets to create securer and safer gateways for banking and financial activities.
SaaS
Software-as-a-Service is the service offered by companies providing digital software that can be stored, upgraded, or downgraded as per the consumers’ requirements. SaaS has been an effective digital alternative to conventional software.
Virtual Cards
Following the lines of e-wallets, virtual cards are digital-only cards that contain card numbers, validity periods, and secret codes, similar to their physical counterparts. These cards can be stored in and linked to e-wallets for online transactions.
Sandbox
Regulatory sandboxes are real-world simulation spaces that allow companies to test their new technology, ideas, and innovations with regular customers in a regulated environment, thus, allowing more efficient, safer tests. The concept of sandboxes is becoming more popular owing to their genuine results.
The list has been curated to explore the most commonly used terms and jargon. The world of fintech is ever-increasing, because of which, the list remains open-ended.
