FinTech and TechFin: Which is the Future of Banking?

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by Adedamola Bada · 6 min read
FinTech and TechFin: Which is the Future of Banking?
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Despite the massive financial backing of FinTech firms, they seem to be behind TechFins in terms of swift consumer satisfaction. So which technology has more chances to be the future of banking? Check out in this guide.

The banking industry that used to be at the forefront of financial solutions appears to be gradually running out of ideas to keep up with the advancement of TechFin companies who are offering financial services to their large consumer base. This brings up the thought on whether a collaboration or merger between the various FinTech companies would bring them the competitive effectiveness they have been so lacking.

A collaboration of these institutions is to enhance productivity for all parties involved as this lets them attract a bigger consumer base, creative thinking, and advanced digital services to boost income; all of which the conventional financial institutions do not possess.

Nevertheless, these financial institutions have over the years built a solid reputation while generating adequate income as well and third-party payment services to their customers while ensuring all regulatory laws are followed.

Reports published by Efma, and CapGemini in April 2020 show that there is a significant gap between what traditional banks offer and what their customers expect. To bridge this gap, these banks would need to integrate financial technology into their operations and make bold moves towards becoming inventive banks.

Also, fintech firms that have been generating regular annual revenues have focused on servicing a smaller customer base while offering them attractive service rates. Despite the massive financial backing that fintech firms enjoy, the many policies and regulations required in customer service prevent them from keeping up with TechFin firms in terms of swift consumer satisfaction.

Differences between FinTech and TechFin

While FinTech and TechFin are both known for providing financial services to their respective customers, their differences lie in their founding corporations. FinTechs are usually affiliated with firms that run their operations using modern methodologies such as mobile banking applications, mobile wallets which are basic examples of services that conventional banks offer.

FinTech Examples

FinTechs who have advanced banking systems are firms such as Paypal, Venmo, Revolut, Zelle, Monzo, and Starling Bank popularly known in Europe and South America today.


Revolut is a British firm founded by Nikolay Storonsky and Vlad Yatsenko with Nikolay spearheading the daily operations as the CEO. The firm acts as a platform for remote financial operations through its mobile app which makes it easier to complete transactions both locally and internationally for free. Although a UK based firm, Revolut operates in over 35 countries and generates over £50 million annually with over 1500 employees.


Paypal Inc. is an online transaction service that is owned in America by Ken Howery, Elon Musk, Luke Nosek, Russel Simmons, Max Levchin, Yu Pan, and Peter Thiel. The firm was originally known as Confinity, up until 2001, after the merger with which was started by Elon Musk, and then it was renamed PayPal Inc. By 2002, The firm became a major subsidiary of eBay, valued at one and a half-billion dollars. As of right now, PayPal is accepted in over 200 countries around the globe in every continent, having over 20,000 employees.

TechFin Solutions

TechFin on the other hand are tech-savvy and software solution firms who find improved ways to offer similar services provided by financial institutions as a part of their wide array of offerings. Over the last couple of years, GAFA (Google, AliPay, Facebook, Apple), which are tech-based establishments providing financial services and have been thriving ever since.


Google LLC is an international establishment that was set up in 1998 by Larry Page and Sergey Brinn, a major subsidiary of a conglomerate known as Alphabet Inc.

GooglePay was formed in 1998, arising from a merger between Google Wallet and Android pay. This payment solution has proven to be moderately efficient and is now in more than 30 countries around the world. It is projected to exhibit tremendous growth like the ApplePay and Wechat Pay in a short span once it has been properly marketed to its software consumer populace.


Alipay was established by Jack Ma and Alibaba Group in 2004. Although the organization started slowly with low expectations, it is currently one of the biggest TechFin start-ups today with a valuation of around $150 billion. The company began to show signs of progress in 2013 when it usurped Paypal as the largest payment solution in the world.

By 2016, the monthly active users grew to about 400 million and have now increased to about 1 billion subscribers from several continents today. Alipay currently operates in over 50 nations of the world today while partnering with reputable services like Visa and Mastercard to ensure their customers can pay from anywhere irrespective of the card type they possess.


Facebook pay which didn’t record as much success as its counterparts was established in 2015 as a means to share money with friends. This is mainly as a result of its main social media platform not gaining daily traffic as usual since the arrival of Whatsapp Inc, Instagram Inc, and Twitter Inc.


In 2014, Apple Inc. released the Apple Pay feature that enables all apple users with an iOS version of 8.1 or higher to make payments and transactions with other people who enable transactions via smartcards. The Apple pay feature is straightforward, with iOS device users making payments via any of the security measures enabled on their device, be it passcode, facial recognition or fingerprint sensor.

The feature was initially limited to consumers within the American border but has since expanded its horizon to over 25 countries, reaching Europe, Africa, Australia, and Asia, while partnering with worldwide reputes like American Express, Visa and MasterCard to ensure that its global customers can access the payment service irrespective of the type of card they own.

FinTech and TechFin: What’s the Future

The usual tedious procedures that people face at financial institutions tend to get annoying with the ease and speed at which TechFin establishments provide financial services to their customers. Over the coming years, TechFin companies are expected to edge out FinTech establishments given the large customer database they possess. This is however not to say that FinTech establishments will become extinct since TechFin companies still have limitations to the financial services they can offer.

Although it is expected to see mergers happen between TechFin and FinTech firms in the coming future, one thing is for sure, both are aimed at bringing a better, faster, and efficient mode of managing consumer finances.

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