Do you purchase items through Apple Pay? Do you carry less cash on you than a decade ago? Most probably, the answer is ‘yes’. That’s because now we have finance and technology, the perfect combination that accelerated the industry of Fintech to boom.
Innovative technological solutions transformed and pushed traditional financial companies into going digital. The adaptation brought customers many benefits, one of the main ones being the much-wanted convenience. See what else Fintech has prepared for us in the future and why the sector found its way to the masses by reading the whole article.
What is Fintech?
Fintech transformed our habits, and it seems that we’re not going to go back to waiting in long queues in physical branches any time soon. Today, thanks to Fintech, we spend, trade, and save differently. The term ‘Fintech” can be traced back to the early 1990s, but its roots started to spread long before that. Approximately, since 2014 the industry has been booming and getting more attention from investors, regulators and customers.
The Timeline Behind Fintech’s Success
Clearly, the Fintech sector became so successful due to its ability to quickly improve the quality and delivery of financial services. Such power made an impact on customers’ expectations, forcing businesses to improve and integrate newer technologies into their agenda.
It’s crazy to think that ages ago, we moved money around using morse code and telegrams. Fast forward to today, billions in investments are linked to the Fintech industry, making it one of the most perspective sectors globally.
Let’s check out some fun facts about the history of Fintech:
- 1997: Nationwide Building Society introduces the first internet banking service.
- 2001: UK banks reach a threshold of 1 million online customers.
- 2004: Ten years before Apple Pay, NTT Docomo, a Japanese mobile operator, creates the first mobile payment system.
- 2007: Barclay designs its first contactless card. The maximum spending limit was set to £10.
- 2009: We’re introduced to the first digital currency, aka Bitcoin.
- 2013: Alipay outnumbers PayPal and becomes the world’s biggest payment platform.
- 2014: Apple introduces Apple Pay to its customers.
- 2016: The replacement of bricks-and-mortar branches continues. Atom becomes the first digital-only bank in the UK.
- 2018: According to Monzo, the company reaches 80% growth due to word-of-mouth customer reviews, marking a milestone in having 1 million customers.
- 2020: The CEO and co-founder of Revolut, Nikolay Storonsky, becomes the UK’s first tech startup billionaire.
- 2021: We’re finally at the Unicorn era. Fintech investments reach $91 billion. At this point, there are 120 Fintech unicorn companies.
Fintech today: The Power of Artificial Intelligence
When we hear ‘Fintech’, there’s a huge chance that one of the first words that comes up is ‘artificial intelligence’. The past faced environment and complex data structures have driven Fintech to a new era, which involves artificial intelligence (AI) and machine learning (ML).
For instance, let’s take open banking and blockchain as an example. Open banking empowers money institutions to share client data and provide custom-tailored solutions that fit the customers’ needs regarding their financial conditions. Inevitably, for that, we need to use blockchain, which enables privacy, transparency, and, of course, security.
It’s undeniable that ML and AI study behavioral patterns that result in a better, personalized experience for the customers of Fintech. But what else is there for businesses? An AI-powered digital ID verification and fraud prevention startup, iDenfy, argues that modern technology helps companies to dig deeper by providing insights and reporting analyses. AI processes complex information very quickly, provisioning Fintech companies and their owners with critical information about how their business is performing.
Online payments have introduced us to convenience that we have never imagined before. Many factors contributed to the enormous growth of the Fintech sectors, such as various E-commerce possibilities or remote working conditions. Taking a smartphone device and bing stuff in a glimpse of a second is part of many customers’ daily routines. It’ll be interesting to see what innovations finance and technology will bring us next.