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Fintech vs Banks: What’s the Difference?


COVID-19 saw a 50% rise in online transactions and mobile banking channels. The fundamentals of traditional banking are changing with the click of a button. The need for new technologies is stronger than ever.

Enter Fintech. Banking for the digital-savvy.

But questions remain: What is Fintech? Is it the same as traditional banking? Do you opt for one or the other?

Read on as we highlight the biggest differences in banks.

But First, What Is Fintech?

Since we are comparing the two, you may ask yourself, “Is a bank?”

The short answer is not in the traditional sense.

Fintech (financial technology) is a technology that automates and improves financial services. Its software uses algorithms on computers and mobile devices to manage financial processes.

Fintech focuses on consumer-based services and functions with a variety of different sectors. Deposit cheques, transfer money, and manage investments all from your smartphone.

Now, Fintech vs Banks: What’s the Difference?

Both traditional banks and Fintech’s goal is to provide a seamless financial service. But there are things in their regulations and the way they conduct business.


Fintech companies create a seamless experience by using artificial intelligence and cloud computing. Customers get a personalized experience because their operating models can rebuild unfavorable regulations.

Traditional banks focus on security and managing financial risks.

Key Functions

Banks are process-oriented. Their rigid structure limits their ability to introduce new services or products quickly. Banks also have to abide by legal requirements, restrictions, and guidelines.

Fintech companies do not have regulators. This gives them the freedom to change their business without strict guidelines. It’s freedom that encourages innovation.

Potential Coverage

Fintech has a higher penetration of mobile phone connectivity. And this allows their market distribution to be higher than traditional banks.

As everything becomes more technological, the coverage will continue to grow.

Fintech also caters to a wider audience. This includes ones with low credit ratings. Whereas traditional banks target customers with proven track records.


For growth with banks, both have potential. In 2020, the global adoption rate rose to over 60%. Convenience, inclusion, and sustainability continue to drive financial technologies. This will fuel features.

But this doesn’t mean that traditional banks are ending. In fact, they are beginning to adopt features to meet customer needs.

This combination of traditional and banks is the best of both worlds! Christian Kubitschek has seen the benefits of hybrid banking. His full-service banks have grown since their adoption of functions.

So, Fintech vs Banks: Friends or Foes?

The lack of regulations makes it a more risky option. Yet, their fast-track technological advances put them ahead of their physical competitors.

To most, the benefits outweigh the risks compared to traditional banks.

Together, as sister institutes, customers could gain the ultimate banking experience!

Stay up to date on all things bank-related by keeping tabs on our Tech blog!

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Written by
Suza Anjleena

Suza Anjleena is a Blogger, Tech Geek, SEO Expert, and Designer. Loves to buy books online, read and write about Technology, Gadgets, Gaming, LifeStyle, Education, Business, and more category articles that are liked by most of her audience. You can contact me via Email to: Thanks

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