Financial technology, or fintech, is the use of new technologies to improve, automate and streamline traditional finance functions. While most people associate fintech with cutting-edge innovations like blockchain and algorithm trading, it also includes a broad array of less flashy applications that can help businesses cut costs and improve customer outcomes.
While the idea of using new technology to streamline banking services is relatively new, the actual development of fintech has been a gradual process. The first ATM was installed in 1967, and the 1970s saw further digitization with the establishment of NASDAQ and SWIFT (which provides a communications protocol between banks to enable international money transfers).
In the 1990s, digital banking began to gain popularity as consumers adopted smartphones and online payment systems. PayPal’s launch in 1998 pointed to a greater trend toward digital payment systems, and the 2008 financial crisis accelerated the adoption of new fintech tools.
The third era of fintech was ushered in by the rise of Bitcoin and other cryptocurrencies, which utilize blockchain technology to allow for secure and transparent transactions. Additionally, fintechs have developed new ways to make it easier for individuals and businesses to obtain loans and credit. For example, peer-to-peer lending companies like LendingClub connect borrowers with lenders, and crowdfunding platforms such as Kickstarter let anyone seek funding for a project. Meanwhile, “insurtech” startups are leveraging AI and satellite imagery to make it easier for insurers to assess risk and calculate premiums. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/