Fintech: A changing agent for the banking, financial industry.

Byline: NAZIR AHMED SHAIKH

The advent of Fintech dates back to the 1950s when the first credit card was invented by a diner's club. Yet, the official use of technology in financial services can be traced back to 1967 when Barclays Bank installed the first ATM in the evolving era of banking. This marked the real shift from technology to digital technology.

The term FinTech or Financial Technology is derived from two words: financial services and digital technology. In simple words, FinTech is the innovative use of technology in the formation and delivery of financial services. FinTech encourages the use of digital technology in startups so that they can come up with innovative products and services, such as mobile payments, alternative finance, online banking, big data, Robo advisors, peer-to-peer lending, crowd-funding, and overall financial management.

FinTech was introduced as a back-end system technology for financial institutions and banks. However, since then, its definition has changed significantly. Today it encompasses several consumer-based applications which can help you trade stocks, manage funds, and pay for your insurance and food via this technology.

According to a study by Fortune, in 2021 that 90% of US citizens use FinTech for managing their finances. A study also says that by 2021, there were 10,000+ fintech startups registered in the United States alone and over 26,000 globally. Currently, there are approximately 2 billion people worldwide without bank accounts or formal financial services. FinTech came as a savior for all those people by providing an easy option to participate in and access financial services. It is also the best option for boosting financial inclusion as it's developed to provide consumers direct access to their finances through simple yet cutting-edge technology.

The research, conducted by East and Partners, finds that the core motivations of global respondents to integrate fintech solutions are reducing operational costs (46%), deploying new technology with greater ease (43%), and aligning more closely with evolving compliance needs (37%).

Digital transformation remains a priority, with global institutions investing an average of $367.6 million in transformation in 2023. European banks are investing substantially more, at an average of $886 million. However, while global respondents say they have digitized 47% of their digital processes on average, only 1 in 5 feel they are ahead on their digital journey (20%), and 1 in 2 (54%) believe they are behind. This is substantially lower in the Middle East, where only 12% feel they are ahead and 62% say they are behind. The research was conducted amongst 783 interviewees at 260 banks in the UK, Europe, the Middle East, Asia Pacific...