Fintechs: opportunities for investors

When you think of technology stocks, you probably don’t immediately think of fintechs. It starts with the abbreviation. How do you explain what a fintech is?
There used to be banks and insurance companies that were summarized under the term financial industry and also had branches as a contact point for customers. However, for a good ten years now, this has no longer done justice to the development of the industry. Many of the companies founded do not fit into the usual mold. There are now neobanks that offer all banking services digitally via app instead of in branches. There are also neobrokers who also digitize investments. The new business models and their brands are not yet as well known as the names of traditional financial service providers, but they are particularly popular with the younger generation. Fintechs emerged during the zero interest period, when there was high demand for low-cost banking services and consumer loans. The companies grew very quickly because the loans were cheap and there were initially no default rates. The tide has now turned slightly. Because interest rates have been high for some time now, numerous fintechs are struggling. It’s also not easy to find investors who will continue to inject money. Going public has also been difficult for fintechs in the past two years.