Fintech: the new financial insitution model
What is fintech?
Short for financial technology, fintech refers to the use of innovation and technology to design, supply, and provide financial services.
Origin
The first stage of fintech (Fintech 1.0) started simultaneously in the United States and the UK with the digitalization of finance, thanks to technological advances such as computers, fax machines, and the first ATM in the United Kingdom (1967).
This stage was followed by the creation of NASDAQ, the first entirely digital stock market. The term fintech first appeared in an article by The Boston Globe, Fin-Tech New Source of Seed Money.
Positive aspects
Thanks to automation and the use of advanced technologies, businesses can offer significantly lower rates than traditional banks. Fintechs offer a smooth and intuitive experience that focuses on the client, which helps strengthen the interaction and makes clients feel more in control over their finances.
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Financial inclusion
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Efficiency and cost reduction
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Innovation and customization
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Modernization and competitiveness
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Financial growth
Negative aspects
Cryptocurrencies are still new and volatile, which means there's a risk of financial loss. Some fintechs have weak regulations and security, which leaves users vulnerable to fraud and hackers.
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Volatility of the financial system
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Dependence on technology
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Lack of human contact
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Weak data protection
