The financial procedures have been drastically evolving in the last century and we’ve been seeing an immense change in many aspects of the finance processes. There are changes in investment, data storage, types of currency and even payments. There is also a new term that became popular during the last two decades – Fintech – which has become an essential piece of our modern world.
Fintech, or financial technology, is the innovation and technology that wants to compete with the traditional financial methods in delivering financial services. There are many examples of technologies that are aiming to make financial services more accessible to the general public, including the use of smartphones for online banking, investing services as well as cryptocurrency.
So that’s the basics. But Fintech is even more than that. Although it’s a relatively new term, this process has been around since the early 1900s in various forms. That’s because banks, organizations and governments are continually trying to improve financial technology and improve services for their customers and citizens.
These days, Fintech has become an essential part of our life. But hundreds of years ago, there was no need for an advance in financial processes. The businesses back then were mostly national and all the transactions were relatively small. This means the businessmen and their customers could easily exchange goods or services for a physical currency.
But the overseas trade grew along with business. And it became one of the most important pieces of the world, meaning that the existing financial processes had to improve. With Fintech, businesses could develop at a faster pace, and millions of people could access funds they need in mere minutes.
In the past century, we’ve seen countless of important breakthroughs in the history of the development of Fintech. For example, the first ATM in the world was opened in 1967 by Barclays. And the first online checking account was used in 1995 by Wells Fargo.
Just three years later, PayPal, the leading online payment processing platform was founded. Eleven years later the first stable cryptocurrency was released by an anonymous professor who named it Bitcoin. And in 2016, which is largely considered as the latest breakthrough, Apple, the digital media giant, released Apple Pay.
So we can see that Fintech has come a long way in a very short amount of time. What started with cash machines and simple electronic payments became fully functioning online banking and digital currency, and much more. Sites like Expedia are now able to connect several services – flight, hotel, car rental and others – in a single search, allowing users to get all they need with a single transaction. Unified, automatic payment systems boost development in unforeseen ways.
But there’s still more that we can discuss about Fintech. More specifically, its most promising forms. This is because some forms of this financial technology development have taken off much greater than others. Some have even received backing and support from different big businesses and governments.
The first one on our list is cloud technology. Many companies have started offering cloud services and cloud financial services. Cloud technology works on the premise of a decentralized storage system that can be accessed from anywhere in the world.
This means you can get easy information access and more available financial information. You can access your bank account from anywhere and you’re guaranteed that all data is secured on the bank’s cloud servers.
Another one is blockchain payment technology. There’s Bitcoin, Ethereum, Litecoin and practically countless of other cryptocurrency. They are all using blockchain technology which allowed the creation of digital and cryptocurrencies. It’s legal currency that actually has no physical coinage like traditional money.
The final one on our list is mobile payment technology, such as PayPal, Android Pay and Apple Pay. They are examples of contactless payments of mobile payment technologies.
Lately, they have been revolutionizing the way we’re paying for everything and made it possible to walk into a store, pick up an item, and pay for it with a simple scan of your smartphone!
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