Five Legal Trends Driving FinTech Success

“FinTech” is shorthand for a wide variety of technologies and companies designed to increase efficiency in the financial sector. Many FinTech businesses (FinTechs) have little in common other than that they seek to apply technological innovation to the financial sector. They include the following:

• start-up and high-growth companies that seek to compete with industry incumbents, in many cases by carving out particular services (e.g., wire transfers and investment management services) out of incumbents’ broader service offerings and in the process providing attractive product features or reduced costs (or both)
• technologically innovative companies that complement and provide services to incumbent industry players by providing augmented services (e.g., chatbots) or are able to expand the incumbent’s reach to new customer populations (e.g., small business services providers and youth-focused app or points providers)