Monday, 27 august 2018 | Redacción CEU
The neologisms with the suffix "-tech" are part of a new growing trend. New words like “insurtech”, “wealthtech”, “regtech” or “lawtech” are spreading strongly through the business world. Professionals and media are using them increasingly to explain the effect that the progress in technology has on the business and financial environment. However, being aware of all the news that digitalization brings about and understanding what the arrival of new disruptive alternatives means can sometimes be difficult. In order to clear up the doubts and delimit what the terms rewriting the old business glossary are, we have decided to make a brief tour through the main “tech” concepts.
The arrival of new digital alternatives that improve or modify the way of proceeding in the different industries in the business and financial fields has led to the borrowing of a list of words that have as a suffix the particle "-tech". Some of them, as in the case of the word “fintech”, are already popular in the corporate culture and have even been featured directly or indirectly in some of our recent articles:
That is the reason why this article has not gone in depth in the meaning of the “fintech” concept. It does not mean that this definition is less relevant, we have simply decided to leave space for other terms which are less known and studied.
Digitization is constantly redefining and reinventing the work environment where professionals work. The accelerated adoption of the business world of new technological solutions has resulted in the proliferation of numerous concepts that explain this new reality. They are the following:
After suffering a severe crisis between 2008 and 2013, the Spanish real estate sector is beginning to recover its good state of health, albeit in a timid but constant way. In part, this recovery is due to the benefits which are provided by the new technological solutions that are being applied to the sector: the sale of buildings the use smart contracts and on the blockchain, the use of different types of crowdfunding, the development of “smart” houses by means of The Internet of Things (IoT), the commercialization of properties thanks to big data and geolocation, the use of artificial intelligence in the planning of buildings, the use of augmented and virtual reality in the sales of flats or the boost of new models like rent-sharing. These proposals usually originate from innovative startups, however, large companies are increasingly interested in betting on these technologies and promoting their development.
There is an aspect which has not gone unnoticed on our blog: the growing concern of the business and financial environment for the improvement of regulatory compliance. The new technological proposals which are emerging are also moving in this direction. The result of this is what we now know as “regtech”. The goal of this discipline is to guarantee the compliance with standards within the framework of the company based on technological solutions that, among other things, allow the process automation. In this way, the companies that are using it offer a greater transparency and more control of risks, as well as favor that compliance is more exhaustive.
This discipline should not be confused with “regtech”, although its name may lead us to think otherwise. This is the bet of the legal sector on the technological adaptation to the provision of legal services. This new specialization contributes to improving the contact between professionals and customers, speeding up processes and procedures, facilitating the self-generation of legal documents or reducing the cost of this type of services. Among its most notorious ramifications, we find legal crowdfunding, legal self-services, such as trademark registration, and smart contracts.
It could be part of a fintech's subcategory, because the goal of “wealthtech" is essentially financial: the advising and the good management of people's economic assets. The access to these services is more democratic, since their users are usually regular individuals, rather than millionaires. This new concept is also transforming the way of investing. Undoubtedly, its best-known proposal is the advice based on algorithms and machine learning, in other words, the use of robo-advisors, especially by small investors, which we have already discussed in the article "Will you let robots manage your finances?". However, there are different alternatives within this new financial-technological category such as robo-retirement, micro-investments or digital brokers.
The insurance business has also known how to take advantage of this technological "fever". The advances in big data, artificial intelligence and the IoT have acted as a great stimulus for the sector. The capacity to have more and better data is a great competitive advantage in the insurance world. So too is the possibility to perform more accurate evaluations and to automate some complicated processes. Thanks to this new concept of insurance digitalization, the products that are offered can be customized to the needs and desires of their customers and the procedures can be more efficient and effective. Proof of the success of this discipline is that, according to the calculation of the analysis firm Juniper Research, insurance companies may move this 2018 year $187,000 billion globally from premiums on their customers thanks to these “insurtech” services.
Along with the “fintech” concept, the aforementioned trends are those that are bursting into the business world with more strength. Anyway, “The Tech Revolution" promises to reach as many sectors as there are. That is why new names are starting to appear on the horizon: "greentech", "madtech", "retailtech" or "foodtech". This fact only highlights an idea, the limits of the technological innovation can only be found at the borders of our imagination.
Would you want to be part of the professionals who will lead the technological revolution in the finance world? At The CEU IAM Business School we teach an Advanced Programme in Digital Finance, FINTECH which responds to the educational training needs in this sector. If, on the other hand, you aspire to work at a bank or at an international business consultancy, you want to become the CFO of your company or you wish to see first hand some of the most impressive and innovative operations in the financial world, the Executive Master's Degree in Finance has been designed for you.