The difference between Fintech & Techfin

The banking industry is evolving at an increasing pace. For the past few years, banks and financial organizations have gone through drastic changes. Recently financial institutions and FinTech startups initiated their cooperation that will bring them to some economic growth. At the same time, dozens of Tech companies are offering various financial solutions that are helping the financial industry to grow. Let’s discover difference between FinTech and TechFin companies.

Giant financial corporations implement an innovative approach and become customer-oriented companies, with modern technologies in use. At the same time, we have traditional institutions, that obtain enough resources and financing. According to the World FinTech Report 2019, an open ecosystem is setting the course for the future of the financial industry, as well as a new partnership between classical banks and FinTech startups.

«The traditional bank must progressively move from a position of ‘universal bank’ to a position of ‘universal partner’ to support customers beyond strictly banking products. Indeed, financial services are at the crossroads of customer journeys. This is an orientation towards a more useful but less visible bank.»
Laurent Darmon
CEO, La Fabrique by Crédit Agricole


The bottom line is the difference between FinTech and TechFin. Between a company based on financial technology and a company that uses technology in its financial activities. The traditional bank is a TechFin company: it sees technology and tries to fit it into existing structures and processes

FinTech Companies – create new digital processes that, in the analog world, function partially or not at all. TechFin companies – digitize processes in accordance with the capabilities of technology, that can function both in the analog world and in the digital one. The traditional bank, which acquired the application, simply added it to its old systems.

A digital bank is being built from scratch and actively uses modern technologies. It functions in a completely different way. Perhaps the best example would be a large bank. A bank like this has branches, staff, history. It notices a new technology and tries to integrate it into its complex structure. A digital startup bank starts from scratch and poses the question differently: «How do we rebuild our financial services based on new technologies?»

Difference between FinTech and TechFin

FinTech and TechFin difference

We need to consider the difference between a company based on financial technology and a company that uses technology in its financial activities.

A traditional bank is a TechFin company: it sees technology and tries to fit it into existing structures and processes. A startup is a FinTech company: takes technology and on its basis creates products for financial markets and structures. The first continues to focus on a physically distributed organization, that exists in the form of many departments, where employees work. At the same time is trying to insert all this technology above all the existing processes.

The second starts with the digital distribution of data on the Internet. Then determines whether it needs offices and employees for work. This is a completely different approach to the problem, and it is inaccessible to most banks since they don’t have anyone from their management, who could make such bold decisions.

So here we have :

As a result, it turns out that FinTech companies think on the basis of existing technologies, revises the structure, and build both – old financial services and new ones. And alongside create disruptive innovations.

TechFin companies think the opposite, how can technology be used in an existing company and service structure. During this process, they create supporting innovations.

In conclusion, both FinTech and TechFin institutions make sure to satisfy the overall winner – the customer. Overall it doesn’t matter what customer chooses – a more traditional or innovative approach. But we c cannot deny the fact the industry keeps changing and most likely technology implementation will be inevitable. Artecha team will gladly let you know about more details.

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