Difference-between Fintech and Banks

Technology in any sector could create a blast in upgrading aspect that would lead to a perfect streamline of upward events. In today’s era of digitalization, everyone depends on technical equipment’s and systems that can enhance their business in some or the other way. Traditional banking methods are now on the closing track due to the entrance of Fintech. The emerging competition from various startups that use Fintech to create extraordinary customer service experiences in banking and financial sector services has forced the big banks to revert back by innovating themselves.


Financial services that are given to the customers using technological aspects such as mobile payments, borrowing and lending etc. is known as fintech. There are various examples that helps us get information about Fintech.

For example, to track mortgage loans, deposited funds, balance enquiries, and checking deposits are mainly counted in fintech services. Fintech services are always in reach with modern age people as well as a network for old age individuals. It is a technology that automates and improves the destined delivery with clear efficiency of financial services.

Technology in any sense can be useful to us wherever and whenever it has been used in an appropriate manner. It has already moved to some of the consumer-based services and is also used now in various sectors such as investment management, retail banking management, etc. Some of the prime functions of fintech are money transfers, investment management, credit applying process. The development of cryptocurrencies has been an additional component of fintech.


These financial institutions are given licenses to accept deposits from their customers and make loans. Banks have various incorporated types such as investment banks, small banks, retails banks, and much more. All these banks are regulated by the central government i.e., the national government. Here, customers can do various transactions on their routine track such as depositing money, withdrawing, bill payments, etc. Wealth management and safe deposit boxes are also some of the banking aspects.

It provides the liquidity needed for families and businesses to invest in the future. Often these banks will offer a higher interest rate to depositors as they raise money to lend for mortgages. Banks are in need of updating or upgrading their own systems to give enhancement to their customers’ needs. Banks as well as traditional finance-related service providers need to be far better in responding to technically well-planned data structure of innovative initiatives.

Dissimilarities between Fintech and Banks

  • Technological dependence – In today’s world, everyone including fintech companies heavily depends on technologies to work on and banks on the other end do not rely heavily on technical enhancements.
  • Structure – Banks have a complex and rigid organizational structure that would itself sometimes become a barrier to innovational changes. Whereas, fintech companies have very few restrictions in structural format and are readily available for any innovational change.
  • Objective – Fintech largely focuses on advanced accessibility, functionality, personalization that would help their customers to experience it in a unique manner. Meanwhile, banks mainly focus on the security as well as management of financial setbacks.
  • Target audience – Banks have always targeted people who have better and proven track records, best credibility, and tough credit ratings. But, fintech helps the ones who are unbanked and has low credit ratings.
  • Market distribution – Smartphones have played a major role in the advancements of technology trends but banks, on the other hand, have very limited market distribution.
  • Technological perspective – Artificial intelligence, machine learning, automation are some key factors fintech relies on, but on the other hand, banks are still lagging behind with their traditional working systems.

Fintech has wide-open opportunities. Here, bankers need to search for an option that will help satisfy their customers. Both have some positives ends to watch upon but being in an official position, they have the advantage to look at how fintech companies are moving upwards with technological help and then approach in a way they need and get their customers satisfied.

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