The business world is full of neologisms coined to name startups and projects in different sectors. We explain what these acronyms mean.
New words have never entered our language so quickly, largely thanks to new technologies. For proof, one need only look at the “Words of the Year” lists compiled by Fundéu BBVA, which invariably feature candidates from the digital world such as ‘bitcoin’, uberization, ‘YouTuber’, ‘phubbing’, video refereeing, trolling, clicktivism, drone, nomophobia, meme, ‘WhatsApping’ or selfie. Indeed, the last of these was named “Word of the Year” in 2014.
The invention of new terms is even more commonplace in business, where it is enough to combine two English words to form an acronym that immediately finds its way into trend reports. In recent years, we have consequently witnessed a proliferation of technology solutions and companies—especially startups—whose names add the suffix -tech to another English word: ‘fintech’, ‘proptech’, ‘insurtech’, ‘wealthtech’, ‘regtech’, ‘legaltech’… But are we clear about what each term means?
Fintech: Finance + Technology
Of all the neologisms formed with the suffix -tech, probably the best known is ‘fintech’. It arises from combining the words finance and technology and refers to projects—many of them run by ‘startups’—that are transforming financial and banking services by applying disruptive ideas supported by the new digital environment. This field encompasses countless solutions: payment methods; decision-making based on the analysis of large volumes of data; customer service through ‘chatbots’; and highly personalized services using artificial intelligence that learns from customer behavior patterns.
Major banks such as BBVA have chosen to create synergies with startups in the fintech world, support the sector’s entrepreneurial community—through projects such as BBVA Open Talent—and even create their own business ventures so that they can be the first to offer the industry’s most innovative services.
Proptech: Property + Technology
Although the real-estate sector has not traditionally been known for innovation, it is now undergoing a revolution thanks to ‘proptech’ companies, which are adding new value throughout the market cycle. These companies offer technology solutions of every kind: modernized property portals and marketplaces; blockchain-based home sales; software for property construction and management; virtual and augmented reality for marketing homes—such as BBVA’s Valora View app—home-automation devices; Internet of Things connections (IoT); and the use of ‘big data’ and geolocation.
Insurtech: Insurance + Technology
The insurance business has always been closely linked to the financial and property sectors. If fintech and proptech are driving a digital revolution, it is therefore logical for new technologies to be applied to insurance as well. Some even view ‘insurtech’ as a branch of fintech devoted to managing policies more efficiently. This primarily requires solutions involving sensors, the Internet of Things, artificial intelligence and big data, designed to detect, collect and analyze large quantities of data from different repositories. When properly managed, this information allows insurers to optimize their internal procedures and, above all, offer better products—with more accurate risk measurement—to increasingly demanding consumers whose habits are changing.
For example, a growing number of insurtech firms are harnessing the potential of computer vision in vehicles to assess possible accident damage and automate insurance claims.
Wealthtech: Wealth + Technology
This acronym adds the familiar suffix -tech to ‘wealth’. ‘Wealthtech’ solutions can therefore also be considered a fintech subcategory, because their purpose is to manage and grow people’s financial assets through technological advances. These companies offer alternatives to traditional investment firms and develop digital support tools for investors and advisers. Among their best-known products are ‘robo-advisers’: automated services that use ‘machine learning’ algorithms to offer advice based on the most profitable investment options, performance objectives, the user’s risk aversion and other variables such as age or income.
Regtech: Regulation + Technology
Another group of technology firms directly linked to banking is ‘regtech’. The term covers tools intended to improve regulatory compliance, optimally address risks to financial stability and integrity, and ensure the protection of consumer data. This is achieved by automating manual processes and analyzing information in detail, which also enables the production of standardized reports for regulators. Those documents can also be used internally to improve business decision-making.
Legaltech: Legal + Technology
The legal sector cannot remain outside the digital revolution, which is why many companies offer technology services under the ‘legaltech’ label to law firms and other legal professionals. We must consider not only the need to regulate and manage potential conflicts in areas that did not exist until recently and remain in constant transformation—such as virtual reality, artificial intelligence and digital identities—but also the increasingly frequent discussion of ‘smart contracts’ that execute automatically on a ‘blockchain’. For these smart contracts to operate with full legal safeguards, experts are needed who can encode the terms of an agreement signed by two or more parties on a blockchain.
Femtech: Female + Technology
Although the term was originally created to define technology startups that develop women-centered health products, it is now applied to a much broader phenomenon encompassing other initiatives that bring feminism and technology together. Among other goals, these companies and associations fight to eliminate the technology sector’s gender gap and promote women’s participation in STEM careers (Science, Technology, Engineering and Mathematics).
Edtech: Education + Technology
The application of technology to education is called ‘edtech’, a term that can be approached from two different perspectives. As an academic branch, it is the discipline that analyzes and solves problems related to learning, teaching and social organization from a technological perspective. From a more pragmatic standpoint, edtech is any form of technology-based teaching or learning, including mobile applications, social networks and artificial intelligence. The ultimate aim of this second meaning is to personalize education as fully as possible and facilitate learning on the basis of each student’s strongest abilities.
Foodtech: Food + Technology
The most innovative startups have also made a forceful entrance into the food sector, where ‘foodtech’ proposals cover a wide range: sophisticated kitchen robots; apps for ordering food for delivery; 3D printers that prepare all kinds of dishes; social networks for meeting new people over a shared meal; restaurants offering virtual- or augmented-reality experiences; personalized recommendations from virtual assistants with artificial intelligence; and tableware that calculates the calories placed on it.
Cleantech: Clean + Technology | Greentech: Green + Technology
Technology solutions and their related business models that help minimize companies’ environmental impact are known as ‘cleantech’ or ‘greentech’. With a focus on sustainable development, these firms’ key areas are resource efficiency, pollution reduction, and research into alternative and renewable energy sources such as solar power, wind power and biofuels.
The food world has not escaped startup innovation: smart kitchens, robot chefs, delivered lunchboxes, food orders with no minimum spend, artificial intelligence for calculating calories…
Biotech: Biology + Technology
Research by firms known as ‘biotech’ companies is directed toward developing and manufacturing equipment that helps improve our lives. Spanish examples include MedLumics, which closed a €34.4 million medical-technology financing round to launch a device for the treatment of atrial fibrillation, a cardiac arrhythmia; Stat-Diagnóstica, which develops technology to detect infectious agents that cause gastrointestinal or respiratory illnesses or meningitis; and Anaconda Biomed, which raised €15 million to manufacture a new-generation catheter for treating acute ischemic stroke.
Healthtech: Health + Technology
Closely related to the previous category, but more focused on optimizing patient care in general, are ‘healthtech’ companies. The range here broadens to encompass solutions used throughout healthcare: booking a doctor’s appointment through an app; ‘wearables’ with sensors that collect patient data; applications that help patients reach the best possible condition before scheduled surgery; and video games that make rehabilitation more bearable.
Madtech: Marketing + Advertising + Technology
‘Madtech’ is the application of technology to marketing and advertising through tools used to interact with audiences and prospective customers, always with the aim of providing added value that can lead to increased sales. These solutions are sometimes also called ‘adtech’.
Retailtech: Retail + Technology
Bringing the user experience of an online store closer to in-person shopping is one of the goals of companies offering retailtech solutions. Their proposals have included the use of RFID technology, ‘beacons or electronic transmitters’ and virtual reality.
