Fintech is a term you may not have heard before, but this process is an integral part of modern society and you use this technology on a daily basis without even realising it. Fintech stands for Financial Technology.
At its most basic definition, Fintech is modern form of technology used to instigate and process financial transactions. In centuries past, Fintech was unheard of – monetary transactions would be carried out by hand using physical coinage, bank notes, and written receipts.
At the time, this process was perfectly viable as trade and business was contained within local areas. As society developed, however, there was a need for quicker and more efficient means of processing financial transactions – this is where Fintech developed.
Since the early 1900’s, a range of Fintech solutions have been developed that have revolutionized the way financial transactions are carried out. This was a natural evolution of the process and has allowed a transformation of the way that we do business on a global scale. Businesses can now engage in trade with other companies from around the world, and process payments in a matter of seconds. Furthermore, we can pay for goods and services without even needing to hand over physical cash through the simple swipe of a credit card! These days even cryptocurrency is becoming a very popular payment method. Online retailers like eGifter and Expedia allow you to pay for their services in Bitcoin and this is arguably the next big thing in Fintech that is going to grow to enormous proportions in the years to come.
The first form of Fintech was developed as early as 1918 which involved a Fedwire Funds Service, operated by the US Federal reserve. Other notable Fintech developments include the ATM (Automated teller machine), electronic trading through markets such as NASDAQ, online payment methods such as PayPal and Apple Pay, and cryptocurrencies such as Bitcoin and Ethereum.
The Fintech industry is worth over 60 billion dollars and contains 5000+ companies. These figures will only increase as new types of Fintech technologies emerge. The infographic below should provide additional information relating to this type of technology, and how it has progressed in the last 100 years: