The term

fintech has become very well known in recent years and now it's time for the term techfin. But, after all, what are the main differences and how do they work in practice? Doubts like these are emerging more and more along with the evolution and popularization of this term. Understand in this article how techfins emerged in Brazil. fintech (financial technology) aims to maximize the use of emerging technologies to disrupt existing financial services models in today's market, while techfin is born to improve experiences, or existing resources in the financial services sector, with a vision more incremented in the core business of the companies.

The term techfin was used for the first time by the founder of the Alibaba group, to refer to Ant Financial (Alibaba's financial initiative that operates the payment system ) at an event in 2016. In his conception, techfins are technology companies that found a better way to deliver financial products after understanding what their customers really need.

In practice, we can say that, while fintechs are focused on users , with the provision of banking services, for example, techfins emerge as developers of technology solutions capable of offering financial solutions for companies that seek modernization and agility in its operations in this area.

In addition, we can also highlight two major trends in the development of a fintech: the first is the speed of change driven by the commoditization of technology, big data, analytics, machine learning and artificial intelligence, trends that are increasingly used in the market. The second is the growing number and variety of new players in the financial sector, including technology and e-commerce companies already present in the market.

When we relate theory to practice, we can say that the

introduction of a techfin usually takes place in three phases: 1st phase – A technology company uses its business model know-how and the data-intensive front-end, i.e., connected to the customer, licensing aggregated data to financial institutions or fintechs.

At this stage, context analyzes of loan or investment decisions are carried out, for example. 2nd phase – In this step, techfin uses this previously collected dataset to guide its own business decisions. A great example is the improvement of risk management in lending money to small and medium sellers.

3rd phase –

Given the importance of all data already collected and stored, techfins can offer financial services, creating direct competition with traditional banks, as they will be able to serve their customers in a safe, agile way and meeting their real needs. The great challenge for techfins during the three phases is to establish partnerships and develop tools that can intelligently analyze all the information necessary for any type of financial transaction.

In this way, in addition to promoting innovation and competition, techfins make it possible to reduce costs in financial transactions and even better business and risk management. Sky.One _ It has a platform specially designed to serve this market, offering external solutions and financial services in a fast and simple way, in the cloud. Want to know how? Click here to learn Sky.Simple , a platform that, connected to the management system, simplifies financial processes.

Written by

Sky.One Team

This content was produced by SkyOne's team of cloud and digital transformation experts.