Financial technology, or fintech, describes the use of digital tools to improve and automate financial services. It encompasses a broad range of services and products, including mobile banking, online lending, and digital payments. It also includes investment management platforms that incorporate big data and artificial intelligence to evaluate investment opportunities and mitigate risks.
The first era of fintech began with the development of telecommunications and global means to exchange information, leading to the establishment of NASDAQ in the 1970s and SWIFT in the 1980s. The transition to digitization of finances was accelerated with the advent of computer systems and bank mainframes (and a Gordon Gecko sense of Wall Street).
This era was characterized by decentralization, allowing customers to bypass traditional routes and more easily obtain financial services. For example, P2P loan apps enable people to make loans directly to other individuals, while blockchain compresses the transfer of assets such as titles for vehicles and homes into a single step that takes seconds rather than days. It also allows people to interact with investment firms using robo-advisors and savings apps instead of traditional brokers.
This era is characterised by the rise of start-ups, whose innovations are helping to transform established financial institutions and change the way consumers interact with them. Unencumbered by processes that are entrenched in larger companies, these startups have been able to develop and launch products at a much faster pace than incumbents, and they’ve gotten the attention of venture capital firms. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/