The Financial Technology Industry (FinTech)

The Financial Technology Industry (FinTech)

Executive summary

The financial technology industry or simply FinTech is an innovation of new technology that is aimed at competing with the traditional methods of finance that are used in delivering financial services. The industry is emerging and is taking advantage I the improvements of contemporary technologies to improve financial activities. Essentially, financial technology entails any application of technology in the provision of financial services. It covers areas of management of financial aspects of business, business models, software applications and business processes. The industry makes use of smart mobile appliances and the internet in offering investing, mobile banking services and crypto currencies among others with the aim of making them more accessible to the markets and the general public. The financial technology industry has been a very attractive industry in the contemporary world. As a result, there have emerged many players that include established banking institutions as well as startups. These organizations have competed on the basis of trying to enhance or replace the usage of financial service that is provided by the existing players. For the existing companies, they are trying to implement solutions in financial technology that develop and improve their services in addition to giving them competitive advantages. This project report therefore evaluates the various industry players in the financial technology industry namely; PayPal, WeChat pay and Alipay with a view of giving a detailed analysis about them in addressing the various requirements of this project.


The financial technology industry has been a game changer in the baking services industry. The improved technology and the use of the internet has globalized the international financial services industry and made possible the execution of financial services virtually. Through financial services the industry has automated financial services, trading in the stock markets, insurance services among other financial services. The industry engages an interconnection of activities that are enhanced through open applications, open banking as well as regulations by players in the financial services industry in various economic and market jurisdictions. For instance, while trading in the capital markets, the financial technology industry makes use of innovative platforms that are used in electronic trading to facilitate online trade in real time. There is also social trading that makes it possible for investor to analyze the trading trends of expert traders and peers and make use of various strategies for investment and exchange of currency in the capital markets. Industry reports indicate that financial technology has been a game changer in the financial services industry. It has since emerged from a data processing platform from the back-end to an end-to-end platform for processing business transactions through the internet and other technologies like cloud services.

Evaluation of industry reports

Financial technology has been around for some time; however, following the global financial crisis in 2008, the industry has evolved significantly and disrupted in a big way the manner in investment, payments, insurance, and asset management, settlement of securities, money and reshaping of trade. In the short years following the global financial crisis in 2008, financial technology has redefined the shape, pace of change and direction of every financial services activity. Industry reports indicate that everything in FinTech has been revolutionalized and customers now expect seamless transactions, real time approvals of loans and free and virtual payment of customer-to-customer transactions. FinTechs have thus emerged an important aspect of the value chain of the financial services industry.

The global business industry has immensely been impacted by the advancements in financial technology. This has created many opportunities in business and offer of financial services and inclusion of the global populace. FinTech has enhanced growth in online buying. This area has expanded exponentially at the expense of shopping in-person resulting in the dominance of online transactions and cashless solutions. It has also shifted the balance of power from banks as well as other financial services providers that own customer experience and instead it is the financial technology that engages the customers. Through the financial technology, financial services providers are getting new platforms for collecting data and creating aggregated market views and use of data analytics that uncover various industry trends. Financial product are also increasingly becoming more tailored to customers who in turn seek coverage of those services in their specific locations, timeframe and user needs. It has also made possible for artificial intelligence and enabled financial services providers to differentiate their product and service offerings. Sustaining Fin Tech has also emerged as being an expensive affair for providers because of its dynamic and changing nature. This has pushed players to seek partnerships with market lenders, FinTech solutions companies to evade a regular overhaul of their infrastructure.

To a larger extent financial technology has been touted as one of the key players in the global economy that ahs enhance the global GDP. It has made possible for seamless flow of global capital, enhanced consumer spending, reduced unemployment, enhanced consumer confidence and improved general living standards of the population in the United States in the developed world. However, there are casualties of financial technology as service providers no longer use human resources as customers are now engaged with the technology. There are a few job cuts here and there for individuals in the industry have did not embrace change. However, following the recovery from the global financial crisis, the unemployment levels in the US have reduced significantly ad the economy is expected to rebound as a matter of going concern.

Opportunities and threats in the industry

The financial technology industry has many opportunities in the United States and international markets. The industry is expected to continue growing. This is mainly due to the universal access to the internet in the United States and international markets. Access to the internet has eased electronic commerce and support for online platforms for payment which enhances the financial technology industry. The millennial generation in an opportunity for the industry because of its tastes and preferences. The millennial generation in the US is tech savvy, uses the internet and prefers online payment platforms to traditional channels. The demonetization impact of financial technology has seen many consumers across the United States embrace the technology because of its convenience and usability. The market for financial technology is also growing at rates that are high than expected. For instance, the industry was expected to achieve investment in excess of $3 billion in 2018 however, the industry had surpassed this by huge margin and has already recorded an investment of $19 billion by 2016.  The US market is the leading in terms of transaction volumes and is trailed by markets like China, Europe and the rest of the world.

Threats for the FinTech industry include competition from the retail banks who are the main competitors. Retail banks are coming up with products and financial solutions that offer own customer experience to counter the technology engagement offered by financial technology. There is also the security and safety threat of financial transactions transacted over FinTech. Retail banks are also partnering with FinTechs or even acquiring them to enhance their customer base which may in the en make them captive or control their operations. There are also data issues whereby customer data is used by partners which breach the privacy and safety needs of customers which impede customer confidence on some financial technology platforms.

Evaluation of the selected FinTech firms

This project evaluates various financial technology firms that include the following: WeChat pay, Alipay and PayPal.

WeChat Pay

Wechat Pay is a Chinese financial technology platform that offers multi-purpose services such as messaging, mobile payment and social media. The application that was developed by Tencent in 2011 and by 2018 was among the largest stand alone mobile apps in the world with over a billion users monthly. In china the app is used for everything or super app because of its wide range of platforms and functions. The applications only come second to leading American applications such as visa, America express and MasterCard.

The main competitors for Wechat pay include Alipay, Apple Pay and Union Pay in china. In the global markets, the main competitors for Wechat Pay are PayPal and other US-based payment applications mentioned above.

WeChat pay mainly offers financial technology services in the Chinese market. Products offered by WeChat pay include messaging, official accounts, subscription and service accounts, moments which offers real time feeds for social feeds an friends updates. The platform also offers payment services, city services that have functions like booking doctor appointments, booking transportation and paying traffic fines in major cities in China. Other products include enterprise WeChat, friends seek and services under development, WeChat out which allows users to call mobile phones around the world among others.

The main customer targets for the company are the contemporary global citizens. In China these customer categories include the business community, the millennial generations essentially people from sixteen years of age to sixty five years. This customer segment in China is mainly tech savvy and uses technology for their convenience. This customer segment is mainly in the middle and upper class people with high living standards and disposable incomes.


Alipay is a Chinese mobile payment platform that was developed in 2004. Alipay was developed by the Alibaba group which is a leading electronic commerce in china and the world. By 2013, Alipay overtook PayPal as the world’s largest online payment platform. By March 2018, the application has over 870 million users, the company controls over 55 percent of the online payment market in china along and enjoys continued growth. The products and services offered by the company include its operation of over 65 financial institutions that include MasterCard and visa. Other products include credit card bill payment, management of bank accounts, P2P transfers, mobile phone top-ups, digital identification and documents storage, train and bus ticket purchases and checking out on mail Chinese websites. The main customer segment for the company is the middle class Chinese and other international citizens transacting business that require electronic commerce transactions. These customer segments require flexibility and convenience and have high disposable incomes.


PayPal Holdings Inc is an American company that operates an online payment system that operates worldwide. The system supports online transfer of money by offering alternative to traditional checks, paper money and money orders. The company has been in operation since 1998. Its main products include credit cards and payment systems. The company recorded total revenue of over $13 billion in 2017.


Similarities between the three companies evaluates entail the fact that they are both online financial services companies that offer innovative solutions to their target markets. When ranked, PayPal is the leading, followed by Alipay and then WeChat pay. While PayPal offers its products and services to the global markets, Alipay and Wechat pay mainly target the Chinese market. Alipay and WeChat pay mainly give PayPal strong competition in the Chinese markets. They also move high volumes of transactions because of the high population in china and the position of China as the second leading economy in the world.


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