Fintech Investment: The complete Guide


Also known as Financial Technology, fintech operates traditional financial services with the help of technology. Nowadays, fintech enhances economic activities in sectors like cryptocurrency, Robo-advising, crowdfunding, and blockchains.

What is Fintech?

Fintech helps the customers deal with their financial activities such as banking, investment, asset management, and tax payments with technology and innovation. Technology brings innovation to the financial sector in several different ways. For instance, compare the services offer through online baking versus going to the bank or investing online versus going to a stock exchange. According to EY’s 2019 Global Fintech Adoption Index, the increase in the percentage of users using Fintech is 16-33% between 2015-2017, and by the end of 2019, this percentage increases to 63%.

How Does Fintech Work?

 Technology has also been a part of the financial sector throughout history, whether it was introducing ATMs or Credit Cards in the 1950s or electronic trading floors. In addition it is also a backend technology for the financial sector, which improved very quickly. Fintech works differently from application to application and project to project. There are many new improvements in fintech, such as machine learning algorithms, blockchains, and data science. Twelve companies are helping fintech to carry out complex and regulatory issues of the financial industry.

Fintech Industries

Following are the industries that rely on it:


An example of fintech is mobile banking or online banking technology. In this digital era, customers prioritize digital baking to have access to their bank accounts quickly. The rise of neobanks leads many companies to offer different features for online banking.

Neobanks is the type of bank with no infrastructure and deals with its customers through a digital and online platform. Moreover, customers can have access to all of the features of a bank within their phones. Some examples of Neobanks are Chime, Simple, and Varo.

Cryptocurrency and Blockchain

Cryptocurrency and blockchain are equal to fintech. Although all of these technologies are different, these three platforms can work together and offer more financial services with some applications.

Investment and Savings

The amount of investing and saving applications has been increased a lot throughout the years because of fintech. Investing became so much more comfortable with the establishment of companies like Stash, Robinhood, and Acorns. These companies’ applications operate differently from each other, but the primary purpose is to allow small investors to invest easily and come into the market.

Machine Learning and Trading

There is no better thing in the financial market than to know before about the market’s direction. The algorithms allow financial technology to learn automatically about the potential risks and trends of the market. Machine learning has become a smart tool to invest in the market with the knowledge of it.


Companies like PayPal, Zelle, Stripe, and Square make the payment method significantly easier for the world. Sending money across the world also became easier nowadays. Financial technology made sending money very simple, fast, and secure. 


People from around the world can apply for a loan through their mobile phone devices. Financial technology made this procedure very easy, fast, and accessible for almost everyone. People can also apply for a loan for more than one time throughout the year. Some credit companies provide these services, such as Tala, Petal, and Credit Karma.


Even though insurance is becoming a company itself but it still falls under the banner of fintech. Insurance is a traditional process to secure the newly started business from potential threats. Fintech is making this system automatic and accessible with the help of technology. Oscar Health, Root Insurance, and PolicyGenius are among the insurance companies that are using fintech.

Types of Fintech Stocks

Fintech is a comprehensive technological financial platform. Here are some types of Fintech Stock:

Payment Processing

This is a transaction between the customer and the merchant to handle the financial calculations.

Online and Mobile Banking

They are the banks’ services to handle your accounts and transactions using the internet.

Online and Peer-to-Peer Lending

This is a money lending platform that allows different lenders to match their borrowers over the internet and lend them money.

Person to Person Payments

Also referred to as P2P payments. It means sending or receiving money from another person in your account through online services linked with your credit/debit cards.

Financial Software

Also known as financial system software. It is an application or software, and its purpose is to keep track of all of a person’s or business’s financial details.

Financial Services

In addition, the finance industry’s services to manage your business financially, including banks, currency exchanges, stock exchanges, and many more.

The fintech industry is growing and evolving day-by-day.

Top Fintech stocks:


It is the industry that evolved a lot throughout the years. Square processes the card payments annually by $100B. People are getting attracted towards it increasing small business lending platform known as Square Capital. Due to Square’s two main features, i.e., Cash App and Square Online Store, it can be proved to be an immensely growing industry.


PayPal is the leading money transfer platform in the world. Nowadays, people prefer to send money through PayPal than to go to banks. PayPal is still improving and evolving, and it can prove to be a good investment.


The other name for this is It is multiple eCommerce platforms, but Mercado Pago Payments are essential from a fintech perspective. With billions of dollars of payments is being processed every quarter, this industry has a massive potential to grow.

Why is Fintech Important?

Fintech is already a part of our lives, whether some of us realize it or not. We are using fintech every time we shop online or do any transaction with our credit card online. Fintech made online shopping secure, easy, and fast for us. It is safe to say that fintech is an integral part of our lives whenever we need to check our account details, do our credit card transactions online, or shop for anything online.

Is Fintech a Good Investment?

Technology is taking over the world as well as the financial sector. Fintech has improved a lot since 2017. When comparing Fintech ETF (FINX) to NASDQ and SPX indices, it has outperform them. FINX ETF in 3 years generated over 200% by the end of 2020. NASDAQ Genereted a %161 gain during this period. SPX generated a 71% gain within the last 3 years. Fintech is a growing industry, and it can be proved to be an excellent investment with the innovations in the financial sectors increasing day-by-day.

fintech stock comparison
Source : TradingView

Our favourite way to get exposure on the latest Fintech stocks is via eToro copyfunds


The financial sector is improving day by day with the help of technology. It has made our lives easier in several aspects, such as banking. Now we can access our bank accounts through our phones with the help of fintech. Many big companies like PayPal, Square, and Green Dot are also using fintech, and it can be proved to be a very investment as it is a growing industry.

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