How Does Fintech Make Money?

how does fintech make money

Fintech is an epic revolution for financial institutions and consumers around the world. The use of digital payments is becoming more common. Financial technology is improving at a quicker rate, and the world is moving towards a cashless economy. According to EY’s Global Fintech Adoption Index, 96% of the consumers globally are aware of at least one fintech service.

how does fintech make money

Banks and financial institutions are utilizing data analytics to digitize operational procedures in an attempt to transform their businesses. Customers, too, are putting a premium on digital convenience over standard bank services. In this regard, fintech companies are thriving rapidly. However, ever wondered how these fintech companies make money? Well, that is what this article is all about.

In this article, you will get to know about the ways through which fintech companies earn their profits. In essence, there are several fintech business models that drive revenue by offering innovative customer financial services. Primarily, we will cover different types of fintech business models. All the fintech startups follow these fintech business models.

Fintech Business Models You Need To Know About

Below, we have jotted down the top fintech business models for you. If you are thinking of making your own fintech company, this knowledge will come in handy.

how does fintech make money


The very first fintech business model on our list is Crowdfunding. The idea of crowdfunding involves collecting money to contribute to projects or financial institutions. Smaller amounts of money are gathered from a bigger audience in order to speed up the process of financing a product or project.

This enables you to acquire the entire required sum of money much faster than attempting to raise it from just one investor. Despite the fact that most crowdsourcing initiatives take place online, offline crowdsourcing is also a possibility.

Crowdfunding has a variety of faces. In return for their donations, early access crowdfunding platforms may provide contributors with access to the beta version of a product or service. Typically, the funds received in this way are used to develop a specific service or product. Profit-sharing is another kind of fundraising where contributors remit current contributions in return for revenue in for prospective profits.

Money Transfer

The procedure of sending money, especially internationally, may be quite challenging. It is not only costly, but the whole process may be rather complex and perplexing.

After the turn of the century, numerous internet-based firms launched to help people send money. Their revenue streams are generally based on getting a commission from each money transfer. Their fastness of cash delivery, as well as cheaper costs (and, in terms of international transfers, better exchange rates), set them apart from the competitors.

PayPal was the first FinTech software firm to have an impact on the world of money transfers, and its influence has been felt throughout the industry. Over the years, several businesses have enhanced this, including Wise and Payoneer. Even digital banks like Revolut now allow users to exchange funds internationally.


As the FinTech software development industry grows, lending platforms are gaining ground. This is where we can tell the difference between a loan platform and a P2P (peer-to-peer) lending solution.

Individuals may borrow money directly from other individuals through peer-to-peer lending, avoiding the middleman and financial institutions. Individuals can get interested in the funds they lend to others using this approach. FinTech software companies profit by brokering such relationships.

The potential for greater returns than those available on debt markets exists with this model, which makes financing for investors easier.

FinTech software companies can assist simplify the corporate lending sector by developing platforms that link lenders with borrowers and charge transaction costs during the repayment process. There are several money lending-specific apps available, yet there is still room for improvement.

Digital Insurance

In the insurance sector, FinTech firms are revolutionizing how services are provided. These Fintechs’ can charge varying premiums depending on the client, allowing them to provide costlier coverage than traditional insurance providers.

They provide life and medical insurance, which have more stringent underwriting processes. These sorts of insurance, when utilized in conjunction with personalized marketing, might offer new revenue streams for insurers.


App advertising is one of the most straightforward methods to make money from apps. This approach works well since consumers do not have to pay subscription fees to use FinTech’s products or services. Advertisers can purchase users’ attention or data in order to generate revenue through FinTechs.

This fintech business model is most often encountered with sites that provide expert advice. NerdWallet, for example, is a website dedicated to assisting consumers in making sound financial decisions. The site generates income through advertisements and has collaborated with third-party service providers to advertise its services.


Neobanking is a Fintech idea that entails the creation of digital platforms – neobanks – that are faster, more efficient, adaptive, and cost-effective. Different neobanks have different goals; some may manage online bank accounts, while others may assist with budgeting and saving.

Robo Advisors

Robo-advisers are platforms that take the place of professional investors. The technologies used by these systems include artificial intelligence and machine learning, allowing them to create algorithms that can effectively manage portfolios. Robinhood, Betterment, and Moneyfarm are examples of firms providing such abilities to their customers.

Although the users are not required to pay a high premium for the Robo-insurance counseling, they must pay a fee that ranges from 10% to 20% of their financial assets.

Transaction Delivery

Data is the new oil, and better data management may provide a wealth of information about a customer’s needs and desires. Transaction delivery Fintech companies are creating free apps like spending management systems to gather client data and then cross-pollinate it with the rest of the group to map out clients’ capacity to pay premiums, invest in real estate, etc.

Final Note

All these fintech business models are quite efficient and are great for fintech startups. You can opt for any of these business models if you are planning to make fintech startups. If you go for it, you will need to create an amazing fintech app. Read our article about how to build a fintech app here. 

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