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Fintech trends explained

As the growth in popularity of peer-to-peer lending and crowdfunding platforms shows, financial technology – or fintech for short – is big business these days.

Banks and other major institutions like pension companies and insurers are gradually recognising the benefits they could reap by embracing a more innovative approach – and there are lots of interesting new ideas currently being tried out when it comes to managing money.

We’ve taken a look at some of the latest trends, explaining how they work and how you might be able to take advantage.


This is a digital currency and payment system – it is often referred to as a virtual currency (as there are no physical notes or coins) or a cryptocurrency (due to the encryption techniques used to generate and exchange bitcoins).

Bitcoin has increasingly been adopted by internet users since it was introduced by independent developers in 2009, and the currency can now be used for many common types of online payments.

But while bitcoin usage fees can be lower than those applied to card transactions, say, there are concerns that the value of bitcoins could be volatile – and it is not always simple to convert them into other currencies.


Bitcoin transactions are recorded securely on an online database called the blockchain. The blockchain is shared among a large network of computers: it is designed to be open to the public and is practically impossible to falsify or tamper with.

While the world’s biggest banks may not be likely to adopt bitcoin, they are very interested in blockchain technology. This is because of the cost savings this innovation could offer to big institutions when it comes to recording their own transactions, from online payments to share dealing and property transfers.


Many successful forms of fintech involve cutting out the middleman out taking advantage of technology. Robo-advisers follow this principle to offer financial advice on the likes of pensions and stock-market investing with a minimum of human interaction.

You won’t actually be getting guidance from a robot – rather a website or online form. But with many people unwilling to pay the hundreds of pounds often charged by real-life financial advisors, robo-advice could be a cost-effective way to get the information you need. This approach is likely to be more suitable for those with fairly simple financial affairs and investment needs.


Rather than leave the innovations to small start-up companies, banks have decided to take a more active role in the development of fintech ideas. This has meant more direct investment in early-stage businesses and the creation of accelerator units, which work closely with a number of entrepreneurs to develop interesting ideas.

It will be no surprise if many of the most exciting new fintech businesses to emerge over the next few years turn out to have started off in such a way.

Marketplace lending

This might be a new term, but it is simply another way of describing peer-to-peer lending or an online lending platform. As the industry evolves and includes other forms of lending and wider mix of investors like institutions, P2P lending is no longer just between individuals or peers – hence some organisations have adopted this new terminology.

However, at Zopa we still believe peer-to-peer lending is an accurate description of what we do. For us, ‘peer-to-peer’ speaks to the direct way we match money as well as how we treat our customers equally, whether they’re borrowers or lenders, institutions or individuals.