If you were asked today to name one sector that has evolved so fast in the past few decades, you’d not be mistaken to mention the financial space. According to the findings by carsurance.net published in their infographic below, the evolution of the financial processes dates back to 1918 when the Federal Reserve Bank in the US developed the very first electronic funds’ transfer system called the Fedwire Funds Service.
But before we dig into its history, let’s see first what exactly fintech is. Below is a simple way of understanding it:
Fintech = FINancial TECHnology
In simple terms, fintech is a form of technology that incorporates the financial and technological aspects in the delivery of financial services.
Despite being considered relatively new today, you’ve seen that the roots of this form of technology could be traced back to the 1910s. Since then, various players including governments, banks, private companies, as well as individuals have been at the forefront of realizing the full potential of fintech.
So, how far has fintech come?
In the last century, a lot has taken place in this niche, as highlighted in the infographic. In this article, however, we’ll only focus on a few major events to give an overview of how far the sector has come.
– 1918 – the US Federal Reserve Bank develops Fedwire Funds Service;
– 1971 – NASDAQ invents the IPO and electronic trading systems;
– 1995 – Wells Fargo develops the first online bank cheque account;
– 1998 – Confinity (currently PayPal) is launched;
– 2011 – Google develops Google Wallet;
– 2018 – global fintech investment hits the $59.5 billion mark.
Clearly, the sector has come a long way even as more opportunities continue to emerge. Over time, the above transformation has seen the fintech sector move from using cash machines to fully-fledged online banking systems as well as digital currencies.
But even as the future of fintech continues to get more promising, there are few specific areas that seem to be doing exceptionally well at the moment. These include the following.
The Blockchain Technology
Blockchain was invented and launched in 2008 by Satoshi Nakamoto, a seasoned and anonymous fintech enthusiast. The tech has in the last decade alone evolved so much as to giving rise to what many know today as cryptocurrencies (virtual money), such as Ethereum and Bitcoin.
Mobile Payments Technology
Mobile payments are not new to many consumers. They have been around since the 90s when PayPal came to existence, and since then, many other similar services have continued to emerge, including Apple Pay, Android Pay, Google Wallet, just to name but a few.
This is one of the most recent forms of technology in the fintech industry. Cloud technology is characterized by a decentralized storage system that can be accessed by users from anywhere around the world.
With the tech, users can access financial information without necessarily having to visit the respective banks or credit card companies. Most companies today rely on this technology not just for convenience purposes but also as a safe technique of preventing data from being distorted or falling into the wrong hands.
From the look of things, fintech is here to stay, and we are just beginning to feel its impact in all the sectors of the economy. Thanks to fintech, today anyone can send or receive money around the world instantly, without forgetting how convenient the tech has made it for shoppers to make payments for the purchases on e-commerce platforms such as Alibaba, Amazon, and eBay.
To find out more information on fintech and its history, feel free to scroll down and check the infographic.