30 Useful Fintech Terms to Get You Started
As Fintech gets more and more inseparable to businesses, jargons of which are starting to be found almost everywhere. You might come across a website asking you to answer a KBA to get through the over-blocking system designed for a specific landing page and have no idea what language it’s trying to communicate in.
That is why we listed down some commonly used terms that might come in handy to someone who’s starting in his/her Fintech journey.
ACH — Stands for Automatic Clearing House. It is responsible for processing large volume of debit and credit transactions. It reduces the cost of fund transfers while making it more efficient and secure.
API — Application Programming Interface, or API, are basically tools or codes used by programmers to build software programs. It facilitates interaction between different programs which lets them perform specific actions.
Bitcoin — It is a payment network and a virtual currency at the same time. As a currency, it functions similar actual money but is only used to purchase or transfer funds electronically. Another characteristic of a bitcoin is that it is decentralized or not regulated by anyone.
Blockchain — a digital ledger that publicly records transactions made in cryptocurrency like bitcoin.
Cryptocurrency — a digital currency that circulates electronically. Bitcoin, Blackcoin, and Namecoin are some of the most popular cryptocurrencies.
Dispute — A term used when a customer questions the validity of a transaction that was registered to the account.
E-check — An electronic check or e-check is a digital form of a paper check. It is used as an alternative to paper checks and cash.
eIDV — Stands for Electronic Identity Verification. It is used to confirm the identification of an individual who claims to be who they are.
Encryption — It is the conversion of information or data into an unrecognizable code to prevent an unauthorized party from viewing it.
Fintech — Combination of the words “Financial” and “Technology. It is an innovation that processes financial activities, usually of a firm, to achieve efficiency, accessibility, and productivity.
Geolocation — The process of identifying an object, person or device’s geographical location by providing coordinates and measurements. GPS or Global Positioning System is one tool used for Geolocation.
Hacktivism — The act of breaking into a computer system, commonly with a purpose of promoting a political agenda or socially motivated purpose.
Insurtech — A portmanteau of “insurance” and “technology” that was inspired by the term Fintech. Insurtech is an application of modern technology in the insurance industry making processes easier.
Joint account — It is a bank account held by more than one person. Joint holders of an account are regarded in law as together making up the ‘owner’, meaning withdrawing cash, writing checks and making payments from one account also allows both partners to see how money is being spent.
KBA — Knowledge Based Authentication is an authentication scheme that asks the user a secret question or two to prove his identity before he can gain access to a website or any digital based service.
KYC — Abbreviated from the term Know-your-customer, KYC means identifying and verifying the customer, typically of a bank or financial institution. This rule must be performed by these institutions to prevent criminal activities such as money laundering.
Landing Page — A web page that is accessed when a certain hyperlink, or sometimes a button, is clicked from another website or software application.
Marketspace — A marketing concept that refers to a virtual market place. It eliminates the distance barrier between a business and its customers by accomplishing most, if not all, transactions electronically.
Netiquette — Coined from the words “internet” and “etiquette”, Netiquette is an unwritten rule of how one should behave or communicate on the internet.
Over-limit — Refers to a situation where a cardholder’s account reached its credit limit with a transaction. If the transaction is not declined, the holder will be charged an over-limit fee.
P2P — Stands for Peer-to-Peer. Peers are computer systems that are connected to each other via internet which enables them to share data directly without the need of a central server.
Ping — Ping expresses the reaction time of an internet connection which is measured in milliseconds (ms). The faster the ping is, the more responsive the internet.
Payment Gateway — a kind of service that automates the payment transaction between the seller and the buyer. It is usually a third-party service that processes, verifies, and accept or decline card transactions on behalf of the merchant through secure internet connections.
Qwikwire — A startup that offers payment processing solution platform to enterprises that essentially helps them collect payments coming from abroad.
RegTech — Short for “Regulatory Technology”. It a subset of Fintech that aims to remedy the difficulties in regulation of financial institutions utilizing modern technology.
Robo-advisor — An artificial intelligence (AI) virtually designed to give financial advice based on algorithms. Its service extends to assets allocation, optimization, and management.
SaaS — Software as a Service (SaaS) are centrally hosted applications that utilize the web to deliver services. These apps are generally cloud-based which allows them to eliminate the need to be downloaded or installed. Salesforce, Workday, and Google Apps are all examples of SaaS.
SSO — Single Sign On, or SSO, is an authentication process that lets the user control multiple applications by signing in with just a single login information.
Tokenization — The process of replacing a personal or sensitive information with unique identification symbols of its equivalent for security purposes.
Underbanked — Describes a person or business who refuse to employ the mainstream financial services offered by banks. They tend to heavily rely on cash rather than on credit cards or checks as a means of funding.
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