When paired with a digital world, financial technology (or fintech) is reshaping the way we use money and manage our investments. It’s also creating new opportunities for monetary professionals and firms, as well as boosting the need for online financial education.
The first wave of fintech applications began with the introduction of technological tools that allowed financial institutions to streamline service delivery and cut costs. These included the ATM, credit cards and the introduction of global telecommunication networks like BACS, CHIPS, SWIFT and others. These systems, along with their successors in the payment space – from cryptocurrencies to payments apps – are the foundation of the modern banking system we all use.
More recently, the popularity of smartphones and the availability of high-speed internet have enabled a new generation of start-ups to leverage a wide variety of advanced technologies. These include open banking – which allows consumers to grant third-party providers access to their bank data – and blockchain technology, an encrypted, distributed ledger that can support “smart contracts,” which execute agreements between parties automatically. These innovations are disrupting traditional financial services firms and enabling new services such as all-in-one money management tools, robo-advisers and peer-to-peer lending.
Another example of fintech is the emergence of alternative financing, which includes crowdfunding and equity-based lending. This has the potential to democratize lending and boost economic growth by providing capital to companies and individuals who may otherwise be excluded from the financial system. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/