What is Fintech?.
Posted on 29/05/20 in
Fintech is a widely used term across multiple sectors which can mean different things to different people.
Investopedia’s Julia Kagan describes it well below.
“Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones. Fintech, the word, is a combination of “financial technology.”
Financial Technology has been around for years and evolves constantly. Many traditional Financial Services institutions have flip-flopped from custom-built solutions to commercial off the shelve solutions.
The challenge for established organisations is their legacy technology estates that have grown organically over time. In many instances, there are few within the organisations who understand the technology, and trying to move off these platforms has often been challenging, expensive, and often failed.
The future in financial services, as with other industries, is about creating digital ecosystems that allow organisations to not only serve their customers digitally but run their businesses in a way that they can respond and adapt to market conditions. Creating seamless information flows, utilising data and automating front to back office processes. For many, the task is daunting, and navigating the right path through can be expensive, time-consuming, and culturally challenging.
It has long been said that traditional organisations who fail to modernise and exploit digital technologies will eventually fall by the wayside. It’s not just about the technology and this is often the challenge and cause of failure. Understanding what the customer needs are and taking a holistic humancentric design approach, that understands how technology can enable better outcomes must be adopted. The need to adapt quickly and respond to market drivers necessitates a rethink. For organisations that have not already embarked on the digitisation of their business and operating models, challenging times are likely to be ahead. Fintech is an enabler to create our future ecosystems.
We will start to see a real step change in the next 5 years to the types of products on the market and how people will access those products.
For deeper insights into Fintech, I recommend reading Julia’s article here https://www.investopedia.com/terms/f/fintech.asp.