Financial technology helps financial services and companies manage the financial aspects of a business.
– Business models.
Fintech companies are often associated with start-ups in markets that were previously dominated by banks and other financial institutions. However, the term fintech encompasses both tech companies and conventional service providers, as well as a wide range of other industry participants. There are major, well-known financial institutions as well as large technology companies (Google, Yahoo, Amazon, etc.) that operate in the financial services field on a global scale.
To take as an example, Chinese WeChat is a set of applications from the Tencent holding. This platform includes the “WeChat Payments” feature, to which every fifth user has connected his bank card and has access to the “Wallet,” which contains all commercial functions and trading accounts. They use their mobile to pay for a variety of products and services both offline and online.
Previously, fintech was perceived solely in the context of internal developments of financial institutions. Now it is as close as possible to the consumer of financial services since it is the basis of all online transactions – from money transfers to payments for utilities.
The rise and evolution of the fintech industry
In 1950, the Diners Club credit card scheme was the first to embody the concept of fintech. It was founded after Frank McNamara, when he was unable to pay for a dinner in a New York restaurant due to a lack of funds.
That is when the first credit card was found.
Self-service points at gas stations or supermarkets or public transportation provided an atmosphere conducive to the development of ATMs in the 1950s and 1960s.
The first electronic trading emerged in the 1970s. Big data made its first moves in the 1980s, and Peter Knight, writing for the Sunday Times, coined the term fintech. He identified the bot that altered his email to them.
The global crisis of 2008 was the main reason for changes in finance. Now, still, people don’t think about traditional banks as much as they used to. Startups and innovative business models started to emerge in response to people’s requests, able to satisfy the needs and increased demands of consumers. Fintech has attracted the interest of lots of large companies, which have begun to invest in the sector.