Financial technology has become one of the most widely used and least precisely defined terms in modern business. It appears in startup pitches, regulation, investment reports, and everyday media, yet there is still confusion about what is actually classified as fintech. Is it only startups. Does it include banks. Does it require new technology, or simply new delivery models.
Understanding what is classified as fintech matters. It affects regulation, investment decisions, competitive analysis, and how companies position themselves in the market. Fintech is not a single product type or industry vertical. It is a structural shift in how financial services are designed, delivered, and consumed.
Let’s provide clear, structured explanation of what is classified as fintech, how the definition has evolved, and where the boundaries now sit.
What fintech actually means
Fintech is short for financial technology. At its simplest, it refers to the use of technology to deliver, improve, or transform financial services. That definition is accurate, but incomplete.
Fintech is not defined by the presence of technology alone. Banks have used technology for decades. What distinguishes fintech is how technology reshapes the structure of financial services, not just their efficiency.
A company is typically classified as fintech when technology is central to its value proposition, operating model, and customer experience in delivering financial functionality.
This includes how money moves, how risk is assessed, how financial decisions are made, and how users interact with financial systems.
Fintech as a structural shift, not a sector
One of the biggest misconceptions is treating fintech as a standalone sector like banking or insurance. In reality, fintech cuts across multiple financial domains.
Payments, lending, wealth management, insurance, foreign exchange, compliance, and accounting can all be fintech-enabled. What changes is not the financial activity itself, but how it is delivered.
Fintech replaces branch-based, paper-driven, and relationship-heavy models with digital-first, automated, and data-driven ones. It often unbundles traditional institutions and rebuilds services as modular components.
This is why fintech includes consumer apps, B2B infrastructure providers, and enterprise platforms, even though they look very different on the surface.
Core categories that are classified as fintech
While fintech is broad, it can be grouped into several core categories. These categories help clarify what is typically included under the fintech label.
Payments and money movement
Payments are one of the earliest and most recognisable fintech categories. This includes digital wallets, online payment gateways, real-time transfers, and cross-border remittances.
Companies such as PayPal and Stripe are classified as fintech because they use technology to abstract complex payment infrastructure and deliver seamless digital experiences.
The focus is on speed, accessibility, global reach, and integration rather than traditional card processing alone.
Digital banking and neobanks
Digital banks and neobanks are fintech companies that provide banking services primarily through digital channels. They may or may not hold a full banking licence, depending on jurisdiction.
What classifies them as fintech is not the absence of regulation, but the technology-first approach to account management, onboarding, and product design.
Examples include app-based current accounts, instant spending insights, and automated savings tools. These features redefine the customer relationship with banking.
Lending and credit technology
Lending fintech covers platforms that use technology to originate, assess, price, or manage credit. This includes consumer loans, SME lending, embedded credit, and buy now pay later models.
Technology plays a central role in underwriting, risk assessment, and distribution. Alternative data, automation, and platform integration are key differentiators.
Even when capital comes from banks or investors, the fintech classification applies if the company controls the technology and decision-making layer.
Wealth management and investing
Fintech also includes platforms that simplify investing, trading, and wealth management. Robo-advisers, commission-free trading apps, and portfolio analytics tools fall into this category.
The defining feature is the use of software and data to lower barriers to entry, personalise advice, or automate portfolio management.
This applies to both consumer-facing apps and B2B platforms that support advisers and institutions.
Insurance technology and insurtech
Insurtech is generally considered a subset of fintech. It covers companies that use technology to design, distribute, or manage insurance products.
This includes digital brokers, usage-based insurance models, automated claims processing, and embedded insurance within non-insurance platforms.
The classification hinges on whether technology fundamentally changes how insurance is priced, sold, or serviced.
Financial infrastructure and B2B fintech
A large and growing part of fintech operates behind the scenes. These companies provide infrastructure rather than consumer products.
This includes Banking-as-a-Service, payments infrastructure, compliance tooling, identity verification, and financial data platforms.
Companies such as Adyen or embedded finance providers are classified as fintech even though end users may never see their brand.
In many cases, these infrastructure providers have more impact on the financial system than consumer apps.
What is not classified as fintech
Not every company that touches money is fintech. Clear boundaries help avoid overextension of the term.
Traditional banks are not automatically fintech, even if they use advanced technology. They become fintech-like only when technology is the core driver of new models rather than a support function.
General software companies are not fintech unless financial functionality is central to their offering. An ERP system that includes basic invoicing is not necessarily fintech. A platform that embeds payments, credit, and cash management as core features often is.
Likewise, pure data analytics firms or cybersecurity providers are not fintech unless their products are directly tied to financial operations or regulation.
Fintech versus big tech and platforms
Another grey area is large technology platforms offering financial services. Companies like Apple, Google, or Amazon provide payments, credit, or wallets in certain markets.
These services are fintech in function, but the companies themselves are not classified as fintech firms. Instead, they operate as platforms embedding fintech capabilities into broader ecosystems.
This distinction matters for regulation and competition. Fintech refers more to the business model and focus than to company size.
Regulation as a defining factor
Regulation plays a central role in fintech classification. Many fintech companies operate in regulated environments, even if they do not hold licences themselves.
What matters is whether the company builds regulated financial workflows into its product. Payments, lending, custody, and advice all trigger regulatory considerations.
Fintech companies often sit between users and regulated institutions, using technology to manage compliance at scale. This intermediary role is a defining characteristic.
How fintech classification has evolved
Early fintech was largely consumer-focused. Payments apps, personal finance tools, and peer-to-peer lending dominated the narrative.
Over time, fintech expanded into B2B, infrastructure, and enterprise services. Today, many of the most valuable fintech companies do not target consumers directly.
Fintech has also moved from disruption narratives to integration narratives. Rather than replacing banks, many fintech firms now power them.
This evolution has widened what is classified as fintech, while also making the definition more structural and less superficial.
Why classification matters for founders and investors
Understanding what is classified as fintech is not academic. It shapes strategy.
For founders, it influences positioning, fundraising, regulation, and talent. Calling a company fintech signals complexity, compliance, and long-term infrastructure thinking.
For investors, fintech classification affects risk assessment, valuation models, and peer comparisons. Infrastructure fintech behaves very differently from consumer fintech.
For regulators and policymakers, classification determines oversight, reporting, and consumer protection frameworks.
The future boundaries of fintech
Fintech continues to expand into areas such as embedded finance, real-time payments, programmable money, and AI-driven decisioning.
As financial services become increasingly invisible and integrated into everyday software, fintech may become less of a label and more of an assumption.
In the long term, the distinction between fintech and financial services may fade. What will remain is the distinction between companies that control financial infrastructure and those that simply use it.
For now, fintech is best understood not as a narrow category, but as a broad classification for companies where technology fundamentally reshapes how financial value is created, delivered, and managed.
