FinTech is the new applications, processes, products, or business models in the
financial services industry, composed of one or more complementary financial
services and provided as an end-to-end process via the Internet. HISTORY OF FINTECH HISTORY • The history of Financial Innovation goes as far back as the 1860’s, when a device known as the pantelegraph was invented. • It is used to verify signatures in banking transactions by sending and receiving transmissions on telegraph cables. • In 1880’s consumers exchange their goods and services for credit using charge coins and charge plates. • In 1966, the telegraph was replaced by telex network for long distance communication. • First ATM was installed by Barclays Bank in the North London. HISTORY CONTD.. • In 1971, the establishment of the National Association of Securities Dealers Automated Quotations (NASDAQ) transformed Fintech. • 1980’s evolution of E-Trade and Online Banking began. • In 2009, the Cryptocurrency, Bitcoin was released. • In 2011, LuFax, an online Internet finance market place is created. SCOPE OF FINTECH • Fintech service firms are currently redefining the way companies and consumers conduct transactions on a daily basis. • The global investments into fintech ventures have been increasing at record speed – tripling from $4 to $12 billion. • In India, the scale has been much smaller but at similar growth rates. • Investment in India’s Fintech industry grew 282 percent between 2013 and 2014. • The scope of FinTech is enormous not in size or growth of this particular industry but also impacts other industries. • FinTech is all about improving the currently existent financial services by using some form of technology. • The scope of fintech includes the following large spheres: • 1. Blockchain and Cryptocurrency • 2. Open banking • 3. Insurtech • 4. Regtech • 5. Inclusive fintech • 6. Cybersecurity. • 7. Robo-advisors. ADVANTAGES • Banks are getting Digitalized. • Better Customer Service - Fintech can speed service and bolster security, • Real-Time Data Collection - The ability to remotely evaluate insured property is especially useful to companies and clients • Easier Payments through smartphones, cards, or other RFID or NFC-equipped devices. • Effective Interaction - Interaction between IoT sensors, apps, and customers could be tailored to encourage better money management habits. DISADVANTAGES • Lack of Security – Data that is available online can easily be stolen by third parties or Hackers. • Complex Networks - The larger the network, the more difficult it is to maintain & Maintenance is tricky. • Only applies to large companies - Effectively large companies started using the FinTech. • Enormous operating cost stemming from multi- layered managements structures and large offices in prime locations.