The Review — 14/02/2018 at 11:15

The FinTech Revolution is here and it’s not going away

by

fintech

What is FinTech?

FinTech is one of the hottest topics in finance and business today. Everyone from fund managers, to bankers, to entrepreneurs are talking about FinTech and its impact on the traditional financial services industry. As a definition, FinTech is considered as a new market that integrates finance and technology. This new market replaces the traditional structures with a new technology-based process. What has really caught the headlines is how this technology disrupts traditional financial sectors such as payments, loans, fundraising, foreign exchange, retail banking, asset management and many others.

Interestingly the birth of FinTech coincided with the banking collapse in 2008 as consumers lost faith and trust in the traditional banking system. The timing was perfect as technology began to become available which would allow savvy and smart entrepreneurs to develop platforms which disrupted the status quo and which now challenge some of the biggest financial services companies around the world.

What impact has FinTech had?

The FinTech industry has quite literally revolutionised the financial services industry. What was once a small set of disruptor businesses taking on the traditional status quo, there are now a host of FinTech firms worth billions of dollars. More than that, a lot of the traditional banks have begun working with FinTech start-ups and entrepreneurs in an open innovation relationship in the hopes of this technology helping grow their own businesses in this space. On the consumer side adoption of new financial technology is growing rapidly, largely in younger individuals and in urban areas. The Ernst and Young FinTech Adoption Index highlights that 17.6% of digitally active customers have used money transfers / payments, 16.7% have used savings / investment products, 7.7% have used insurance products, and 5.6% have used credit lending products. This growth is expected to increase rapidly over the coming years.

In the UK, in particular, the financial sector has been the main driver of the country’s economic recovery and much of that has been down to the huge growth of FinTech in the UK. The Office of the Mayor of London confirmed that 40% of the London workforce is made up of the financial and technology services alone.

We now have companies like IEX, which is a massive disruptor in the Exchange space, TransferWise which challenges the transfer of money across borders, and LendingClub which was a pioneer in peer-to-peer lending. We also have 360T, iCap, TradeWeb, Trading Screen, and Charles River in the FX, Trading, Information, and Investment Management spaces all with technology at the core of their processes and products.


Read this article on ec1partners.com


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