TradFi

TradFi, short for Traditional Finance, refers to the traditional financial system where financial transactions and services are conducted through traditional intermediaries and institutions.

TradFi represents an approach that utilizes traditional financial instruments and methods to carry out financial transactions. This approach is supported by traditional financial institutions such as banks, insurance companies, brokerage firms, and other financial organizations.

TradFi has long been the foundation of financial systems and has ensured the secure, regulated, and reliable execution of financial transactions. Traditional finance encompasses financial instruments such as credit cards, bank accounts, stocks, bonds, and insurance.

However, in recent years, the emergence of the FinTech (Financial Technology) sector has occurred alongside the development of digital technologies. FinTech refers to an approach where financial services are delivered through digital tools and platforms, leading to the emergence of new financial instruments and methods.

There are several differences between TradFi and FinTech. TradFi utilizes traditional financial institutions and instruments to carry out financial transactions, while FinTech offers financial services using digital technologies and platforms. As a result, TradFi has a more regulated and secure structure, whereas FinTech can operate in a more innovative and agile manner.

In summary, TradFi represents a financial approach that utilizes traditional financial instruments and institutions. It benefits from the security and regulation advantages of traditional financial systems but may have limitations in terms of innovation and agility compared to FinTech.