To The Moon

I believe we have all applied for a mortgage preapproval or bought insurance online, we have also more or less save time and money by working with a fintech company.

As more investors get more tech-minded, fintech stocks have taken the financial industry by storm, and they provide investors an avenue to combine their vision with some of the top healthcare and finance companies

What Are Fintech Stocks?

A portmanteau of the words "finance" and " technology," fintech stocks are stocks issued by companies that use technology to make financial services more accessible using the internet. If we have ever applied for a mortgage or student loan online, made online payments using a mobile banking app or sent money to someone using a company like PayPal, we have already used a fintech product.

Because of their ability to provide a wider range of financial services to a more diverse audience, we can see that fintech stocks have been in demand by investors. One other advantage is financial technology eliminates the need for a physical location, which lowers overhead costs for traditional banking operations. The rise of online banks like SoFi and Chime have been lauded for their ability to expand services to historically underserved communities. 

Why invest in fintech stocks?

As more and more public fintech companies debut on major markets, we can consider adding a fintech stock or two to our portfolio. The following are some benefits we might see after investing. 

Rapid industry growth

Fintech is a fast-growing sector driven by increasing demand for digital financial solutions, technological advancements and changing consumer preferences. Investing in fintech stocks allows you to capitalize on this growth potential and be part of an industry reshaping the financial landscape.

Addressing unmet needs

Fintech companies often address unmet needs in the financial market.

For example, a major benefit of fintech companies that offer mortgage solutions is allowing the borrower to apply for a loan at any time by utilizing online underwriting processes. If we look at how $SoFi Technologies Inc.(SOFI)$ lending have been increasing due the ease of applying for a loan by streamlining underwriting processes. This is something we could be seeing in traditional banks innovations.

This is especially useful for customers as most of us work a traditional 9-to-5 job when banks are traditionally open for in-person services., to apply for a loan online would be definitely welcome. As an investor, to put money into companies serving underserved segments of the market. 

Technological innovation

Fintech companies are at the forefront of technological innovation, leveraging artificial intelligence, big data, blockchain and other cutting-edge technologies. As these technologies continue to advance, fintech firms may benefit from staying ahead of the curve, meaning that the top fintech stocks may offer you the chance to benefit from these innovations. 

Blockchain and cryptocurrencies

Blockchain and cryptocurrency technologies have challenged traditional payment systems, proposing a decentralized method to send money without a central transaction authority. While cryptocurrencies have proven to be more volatile assets when compared to other types of fintech offerings, a small amount of exposure can provide a unique level of exposure to social media-driven assets.

If you have looked at how $Robinhood(HOOD)$ latest earnings result have shown, their crypto notional volume have a significant increase, this suggest to us that to be a successful fintech banks, the ability to offer a wide range of innovative products is critical especially for the new group of customers.

Another stocks we should ve looking at is $Coinbase Global, Inc.(COIN)$ they have allowed not only to purchase and sell crypto, they also allow customers to earn by staking their crypto for example Ethereum.

If we look at the rewards rate, we could see that the range is pretty wide, this would attract more users to the platform. As investors we would be focused on how the company make money, which is from the transaction fees from this fintech companies.

Participation in the cashless economy 

As digital payments become increasingly prevalent, fintech companies facilitating online transactions and digital payments stand to benefit from the growth of the cashless economy. If you believe that consumer preferences will continue to trend toward cashless payments, investing in fintech companies might provide the chance to be an early adopter in these sectors. 

Summary

By having multiple types of fintech companies into our portfolio can help increase diversification, limiting loss in each area in the event of a sudden market turn. It can be essential in the tech sector, where consumer trends change rapidly according to evolving consumer preferences. 

As with any investment sector, only invest as much money as we can afford to lose comfortably in an individual fintech company.

Appreciate if you could share your thoughts in the comment section whether you think fintech stocks would be something that we should include in our portfolio?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.