How Financial Technology Is Transforming the Financial Services Sector

Financial technology (or fintech) is transforming the financial services sector. From how we deposit a check to how small business owners can easily choose their insurance, these innovations are making a significant impact.

Fintech has evolved from behind-the-scenes systems at banking institutions to include the development of consumer-oriented applications, including crowdfunding, peer-to-peer lending, cryptocurrency, and blockchain. This shift has resulted in new tools, apps and platforms that are empowering individuals to manage their finances more intuitively and with greater transparency.

Fintech 1.0: Someone throws a wire under the Atlantic
In the early days of fintech, developments were relatively limited in scope – at least geographically. But in 1886, someone threw a cable under the Atlantic and that kick-started the way that banks do business today. This era was marked by the introduction of credit cards, the first global telex network that greatly facilitated communication and transactions, and ATMs.

Fintech 2.0: Someone creates a mobile app
The next wave of innovation in finance was catalyzed by the 2008 financial crisis and the emergence of mobile devices, which enabled start-up companies to develop innovative digital solutions that improve the customer experience. This era was marked by the creation of the world’s first mobile app, Square, which allowed small businesses and consumers to accept credit cards through their phones, and Banking as a Service (BaaS) platforms like Treezor and SolarisBank that allow financial institutions to replace legacy systems with innovative products. Other notable innovations in this era were e-commerce and online trading platforms, such as eBay and Amazon, which have lowered the barriers to entry for small businesses.

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