Que son las Fintech e Insurtech

What are FinTech and InsurTech, how do they work and what is their impact? These are some of the questions we will answer in this article. 

FinTechs are companies that use advanced digital technologies to optimize financial services and other industries, while InsurTechs only focus on the insurance sector. Both seek to create more open and democratic markets, increase profitability and improve the customer experience.

FinTech and InsurTech have come to revolutionize the financial and insurance business. Here we tell you all about these innovative business models, how they impact society and existing companies. In addition, we tell you what is the formula for both models (traditional and innovative) to coexist without dying in the attempt.

What are Fintechs and how do they work?

The term FinTech is a contraction of the words finance y technology. It refers to the trend of implementing digital transformation to optimize the activities of the financial industry.

The meaning of FinTech relates to the set of financial companies and services that transform the use of information technology in pursuit of revolutionizing the way administrative and financial services are provided and understood.

However, the participation of FinTech is not limited to the financial industry per se. The purpose of financial technology is to improve and offer new opportunities to the ways in which small, medium and large companies in different industries apply and manage their own finances.

According to the Inter-American Development Bank (IDB), there are more than 700 technofinance companies operating in Latin America that offer financial services platforms.

25.6% of these FinTechs 

focus on alternative financings, 

such as donations, the real estate 

consumer, and SME lending.

Source: BID

So, we can say that the main objectives of financial technologies are: 

  • Add value to current financial services,
  • To generate practical solutions through technological innovation to the administrative, accounting and economic activities of companies,
  • Revolutionize traditional financial processes.

What are the benefits offered by FinTech

  • Streamline the processes of payments, transactions and online banking,
  • Develop infrastructure for financial services through data science, big data, business intelligence, blockchain, among others,
  • Improve cybersecurity and the development of systems for database security,
  • Manage digital assets, cryptocurrencies and improve alternative monetary policy,
  • Automated management of online financial processes,
  • Conduct crowdfunding activities.

What is an Insurtech and how is it impacting the insurance business model?

For those unfamiliar with the term, InsurTech refers to the phenomenon of startups that are innovating using technology to improve the current business model in insurance.

Technology has played a major role in changing the nature of many other industries, such as music, retail, travel, and the increasingly successful marriage of finance and technology, known as FinTech.

At first glance, InsurTech appears to be a “poor cousin” to FinTech, which is much more prominent and has gained enormous global attention. But in the face of this perception, we must keep in mind that the InsurTech phenomenon is much more recent and globally the insurance industry  is still coming to grips with its implications. If we take a closer look at the numbers, it seems that the gap compared to FinTech is closing rapidly, and significant growth is expected in the coming years.

In Latam there are currently 

there are 210 Insurtech

Source: Finnovista 2021

InsurTechs use smart technology in the insurance industry to transform it and open up great opportunities for business investment. In other words, InsurTech companies are transforming the principles and strategies of traditional insurance companies.

InsurTech companies have based their optimizations on offering customers a better experience so that they can get a suitable product faster.  They work by collecting information from customers and, thanks to that, they know each person’s situation better. Thus, the risk to be insured is calculated more accurately. This allows them to offer tailor-made insurance, for example, personalized products that are adapted to your needs.

What is the impact of FinTech and InsurTech on society and the business sector?

When we analyze these companies further, we can see that they are very important. Both for the sectors and for society in general. 

The three functions to highlight are:

01 Innovation Acceleration.

  • As startups, they have the necessary capacity to integrate new business models. Also, to incorporate the latest technologies with very agile and dynamic models.

02 Financial and insurance inclusion

  • Allowing access to various financial and insurance products to all segments of the population. Regardless of economic level, technical knowledge, age or remoteness of the population in which they live.

03 Financial and insurance democratization

  • Facilitating the distribution of new products for new needs, to be able to invest, obtain loans or insure everything you need, for as long as you need it and just when you need it.

In fact, according to the World InsurTech Report, developed by the consulting firm Capgemini and the NGO Efma, insurance executives believe that the InsurTech model will be the main catalyst for redefining the customer experience, delivering efficiencies, and creating new business formats.

36,5 % was the growth 

annual investment rate for the InsurTech 

for the InsurTech sector between 2014 and 2017.

Source: World Insurtech Report (2020)

As far as companies developing FinTech solutions are concerned, they are expected to reshape the financial system with actions such as:

  • Generating incentives that foster competition, 
  • Promoting better financial performance of companies (for example, by streamlining payment options or reducing the cost of credit),
  • Incentivizing savings and investment in new segments of potential clients, who up to now do not have banking services according to their needs.

Are Fintech and Insurtech good or bad for companies already consolidated in the financial and insurance industry?

This is a very good question and one that must surely have several types of answers, depending on the angle and perspective we approach it from.

But we have some aspects that are irrefutable and that will help us answer this question.


  • InsurTech and FinTech in general, are the ones that are leading the way in evolution in these industries.


  • In general, all traditional financial institutions continue to dominate the market and concentrate the largest number of clients.



  • The focus in the evaluation of FinTech changed from many “cool” ideas to practical solutions that solve specific banking problems.


  • Today investments and market management are in the hands of the traditional companies in these industries.

This leads us to the conclusion that the best possible equation between the traditional industry and the innovative FinTech and InsurTech is a collaboration between the two, which we believe is the path to sustainable success.

In short, we consider FinTech and InsurTech to be “superheroes” that come to make these markets more open, and democratic, increasing their profitability and improving the customer experience.

What do you think? We would like to know your opinion on whether FinTech and InsurTech are superhero villains. Get in touch and tell us.

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