Fintech cuts a wide swath, covering the digital, online and network-based tools and services used by banks, brokerages and other financial institutions. But while it is, by its very nature, technology, the best fintech stocks span the gamut from young to old – even long-established credit-card companies such as Visa (V) and Mastercard (MA) fit under the “fintech” umbrella.
Some fintech tools provide customers more convenient banking and financial services. Other companies in the space allow banks to simplify compliance, recordkeeping and myriad mission-critical, everyday and other functions.
In general, fintech is good for everyone: Financial institutions can lower their costs (and boost earnings), and customers enjoy better, faster, cheaper financial services.
Many financial institutions finally are more profitable than in the years leading up to the financial crisis. With stronger earnings, aided by corporate tax cuts and an improved economy, banks are increasing their spending on technology. This, as well as other drivers, are boosting the earnings of these five fintech stocks – and setting the stage for further growth.