There is some debate as to the origins of financial technology, aka fintech. Some sources place it as early as the 1950s, with the advent of the first credit card, while others posit that the true rise of fintech came with the 2008 economic crisis, after which business owners and consumers put greater emphasis on controlling spending and financing. Fintech, which frequently puts control and power directly in the hands of consumers and small businesses, made foundational leaps, especially when it came to processing payments digitally through mobile banking and smartphones.

But while other industries eagerly joined the fintech renaissance, construction companies lagged behind—possibly because of the very events that inspired the boom. A study on industry connectivity found that construction and related industries not only were hit harder than other sectors by the crisis, but also took much longer to recover. More jobs were lost and more businesses went under, and such upheaval wouldn’t be conducive to updating old processes.

What has this meant for construction technology? While contech likewise was initially slow to be adopted, recent years have seen a massive shift. Companies are now looking at better ways to conduct business. Additionally, construction has financial challenges that make it particularly open to recent advances in fintech, including prerecession methods of billing, massively high insurance costs and strangled cash flows.

The industry is modernizing—thanks to a growing number of construction-specific solutions as well as external forces such as the pandemic, which has more or less forced companies to digitize and become more efficient. Contech garnered some $4.5 billion in investment in 2021, and construction is ready to move forward in a big way. The intersection between contech and fintech will only grow as companies look to extend their control over fiscal areas of their businesses.

Lauren Pesola
Content Marketing Specialist
Flashtract