Fintech refers to the novel processes and products that become available for financial services thanks to digital technological advancements. More precisely, the Financial Stability Board defines fintech as “technologically enabled financial innovation that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of financial services1).
The areas of actual and potential expansion of Fintech are: a) transactions execution (payments, clearing and settlement); b) funds management (deposit, lending, capital raising and investment management); and c) insurance.
The ability to impact on essentially all the services typically offered by traditional financial institutions, such as banks, comes from cost reductions implied by digital technology advancements, improved and novel products for consumers and limited regulatory burden. More specifically, with technological advancements Fintech operators benefit from: i) lower costs of search that enable matching in financial markets more effectively, ii) economies of scale in collecting and manipulating large bunches of data, iii) cheaper and more secure transmission of information, iv) lower costs of verification.

Source: what is Fintech