Fintech & the future of investing
Guide Summary
- Fintech platforms are making investing more accessible through innovations like fractional shares, robo-advisors, and user-friendly mobile interfaces.
- Regulation is key — UK fintechs must be authorised by the FCA, helping to protect users and maintain fair standards.
- The future of investing is likely to become more personalised, digital, and community-driven, with fintech continuing to challenge traditional finance.
What is Fintech?
Fintech, short for "financial technology", refers to the innovative use of technology to deliver financial services in faster, more efficient, and user-friendly ways.
Whether it's making a payment through your smartphone, automating savings, or accessing investment platforms online, fintech is reshaping how people interact with money.
Its rapid growth has significantly influenced personal finance, banking, and investing, particularly for beginner investors.
How fintech has changed the landscape
Technology has disrupted traditional finance models in a number of ways:
- Open Banking: This allows licensed fintech firms to securely access financial data (with user permission) from major banks. It encourages competition and enables tailored tools for budgeting, saving, and investing.
- Cryptocurrencies: Although high-risk and highly volatile, crypto assets have become part of the broader investing conversation, particularly among younger investors.
- Robo-Advisors: These algorithm-driven tools automate investment decisions based on a user’s goals, risk appetite, and time horizon, reducing the need for human financial advisors.
- AI and Data Analytics: Artificial intelligence is powering smarter tools for portfolio management, financial planning, and fraud detection. It's also enabling more personalised investment recommendations at scale.
- Fractional Shares: Enabled by tech platforms, fractional shares allow users to invest in portions of high-priced assets — making investing more affordable and inclusive.
Are fintech companies making investing more accessible?
Fintech companies have had a huge impact on the world of investing. Previously, the entry into investing was a lot higher and more complicated. Fintechs have changed this, such as:
- Lower Barriers to Entry: Features like fractional shares allow users to start investing with just a few pounds, without needing to buy whole stocks.
- User-Friendly Interfaces: Many platforms are designed for beginners, offering clear explanations, educational content, and intuitive dashboards.
- Low/No Minimum Balances: Traditional investing sometimes requires large upfront deposits. Fintech platforms often remove or reduce these requirements.
- Mobile Access: The ability to manage investments from a smartphone increases access for users who may not live near a traditional financial institution.
Fintech and the future of banking
Fintech isn't just a supplement to traditional banking — it's increasingly becoming an alternative. As digital-native generations demand faster, personalised services, banks are being challenged to innovate or collaborate with fintech providers.
Expect continued growth in features like:
- Seamless investing integrated within digital banking apps
- Predictive financial planning using AI
- More flexible, modular financial products
How are fintechs funded?
Fintech companies often rely on a mix of:
- Venture Capital (VC): Private investors backing early-stage innovation
- Crowdfunding: Where everyday users can invest in the company itself
- Revenue-Based Models: Fees from premium features, subscriptions, or commissions
- Institutional Investment: From traditional financial players seeking digital exposure
The funding model can impact how a platform grows and the types of services it prioritises.
Do people trust fintech over high street banks?
Consumer trust in fintech is growing, particularly among younger users. While traditional banks benefit from longstanding reputations, fintech platforms offer speed, innovation, and often better user experiences.
However, trust varies depending on:
- Security protocols
- Transparency in pricing
- Customer service quality
- Regulatory compliance
Surveys show that while many users are open to fintech solutions, trust often increases once users try the service and experience its benefits.
How are fintech companies regulated?
In the UK, fintech companies must be authorised and regulated by the Financial Conduct Authority (FCA). This includes:
- Ensuring platforms act in the best interests of customers
- Meeting capital requirements to remain solvent
- Protecting user data and funds
- Operating with transparency and fairness
Users can check the FCA Register to verify if a company is properly authorised. Regulation is especially important in protecting users in cases of fraud, poor financial advice, or platform failure.
Fintech summary
Fintech is reshaping the way people in the UK approach investing. From fractional shares to automated tools, it’s lowering barriers and offering more people a path toward building wealth.
However, it's important to understand how these platforms are regulated, funded, and trusted before diving in.
At the start of your investing journey, you’ll need to decide if you want to take an active or passive approach to your investments. In the next guide in this Investment Strategies series, we’ll cover the difference between these two strategies.
When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than your original investment. Chip does not offer financial advice and this should not be considered as a personal recommendation.
