November 24, 2023
Fintech is a combination of the words “financial” and “technology” and it refers to any software, app, hardware, or other digital tools that allow customers and businesses to digitally access, manage, or gain insights into their finances or make financial transactions. You utilize fintech services and tech whenever you use mobile payments, online banking, peer-to-peer lending, the blockchain, cryptocurrencies, robo-advisors, and more. The ultimate goal of fintech is to provide more efficient and accessible financial solutions to individuals and enterprises.
Below we have provided a list of common Fintech words and their definitions. The information provided here does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
A security protocol that uses three distinct domains to address security vulnerabilities and fraud in online card transactions.
Best practices followed by financial institutions to combat money laundering.
The set of tools, procedures, and protocols for developing applications that allow fintech systems to interact. It defines the methods and data formats that applications can use to request and exchange information. In the context of fintech, APIs play a crucial role in enabling various financial systems to interact seamlessly.
Allows financial institutions or third-party organizations to access banking services through an API.
The electronic system for transferring funds.
A digital currency you can send directly to others without needing banks.
A blockchain is a distributed database that maintains a continuously growing list of ordered records, called blocks. Simply put, it is a secure digital record system. It’s the tech behind Bitcoin, but other digital currencies may use different systems.
Digital money that’s managed by a decentralized system using cryptography, a type of encryption, to verify transactions, maintain records, and protect sensitive data. It has gained popularity partly due to the anonymity it offers to users. Bitcoin and Ether are examples.
A digital item of value. In the blockchain, this can be a cryptocurrency or a token.
A shared digital database that is held and updated independently by each user in a large network. Each user is a node and when the ledger is updated these nodes, or connection points, communicate via a decentralized system. Once a decision has been made the copy of the ledger is updated across all the nodes. It lets many people see transaction records.
Financial activities without traditional middlemen like banks. It’s often based on blockchain.
Digital currency used on the Ethereum network.
Money issued by governments, like dollars or euros, not backed by physical goods.
A way companies raise money by selling new digital currencies.
How digital currencies like Bitcoin are made and added to the system.
A unique digital certificate for online items. It’s often tracked on the Ethereum system.
Open banking refers to the secure and standardized sharing of financial data by banks with third-party providers, facilitated by APIs, to promote enhanced financial services for consumers.
Direct interactions between two people without a middleman. For example, sending money directly online.
The address you give others to receive digital money.
A secret code you need to access your digital money.
Automated agreements on blockchain. They work when set conditions are met.
Digital money tied to a real-world currency’s value, like the U.S. Dollar.
Digital items of value made on existing blockchain systems. They’re different from the main currency of that system.
The process of converting sensitive data, like credit card numbers, into non-sensitive tokens to enhance transaction security.
To read more about tokenization, check out our article Understanding Tokenization Basics.
Digital money used for trade but isn’t official money like dollars or euros.
A digital place, often an app, where you keep your digital money. It handles your digital money addresses.
The glossary provided offers a foundational understanding of Fintech terms. At Clear Function, we are always happy to answer any questions you may have. Book a call with us today!
The information provided here does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.