The rapid advances in digital technology are reshaping the economic and financial landscape. This phenomenon is known as fintech and it is impacting everyone — from consumers to incumbents, new entrants and regulators. Fintechs are leveraging the power of telecommunications and global means of information-sharing to streamline services and improve financial systems around the world.
McKinsey defines fintech as a combination of technologies that transform the way monetary systems operate. These technologies are enabling more efficient and innovative monetary tools for financial institutions, consumers, and emerging markets. They range from the use of telecommunications to enable payments and trades to the creation of entirely virtual banks.
Fintech has historically been focused on the back-office systems of banking institutions, but it has since evolved to include consumer-oriented services, such as payment solutions, and more complex technology like blockchain. It has also expanded to cover areas such as crowdfunding and fundraising, mortgage lending, and robo-advisers.
The first phase of fintech occurred in the 1990s with a focus on digital banking and payments. This included the first ATMs, the launch of PayPal in 1998, and a greater shift toward online banking systems that are easier for consumers to manage.
The second phase of fintech has seen the rise of big data analytics. This allows monetary institutions to better understand their customers, from analyzing a customer’s spending habits to assessing risk by studying the patterns of his or her financial behavior. This information can help to enhance a consumer’s experience with the institution and to make more informed decisions about loans and investments. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/