Friday, July 19, 2024

Fintech

In 1967 Barclays Bank opened its first Automatic Tilling Machine. This event marked the beginning of a new era of digitalisation in the financial sector. Since then, banks, lending institutions, investment groups, factoring companies and individual investors have increasingly looked to digital solutions to conduct financial transactions. This led to the creation of the portmanteau word ‘fintech’ which combines together the two words ‘financial’ and ‘technology’.Things have moved on considerably since the first ATM machine. Everyday life in the 21st Century provides us with many examples of successful fintech. Perhaps most notably people can now do their banking on their smartphone. This is a good example of how fintech has changed the financial sector. Since mobile banking we have witnessed a steady decline in the demand for physical banks.Say you want to pay in a cheque, you can use an app to photograph the cheque and send it to your bank for deposit. If you want to pay for an item online you don’t even need to access your bank account. Instead you can use PayPal. If you want to buy shares you no longer need a stock broker on a commission or retainer. Rather, you can use eToro. You can easily buy Bitcoin and other cryptocurrencies on digital platforms either centrally controlled (Binance and Coinbase) or decentralised (Uniswap and PancakeSwap). The impact of fintech in our everyday lives is undeniable.From African farmers getting small loans using banking services through their mobile phone to Europeans booking plane tickets and hotels online, fintech has provided companies and consumers with easy-to-use solutions. These solutions are customisable, scalable and secure. They don’t require visiting a bank or a travel agent, and don’t even need a telephone landline.

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