The Evolution of Financial Technology

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Fintech (financial technology) encompasses a wide range of digital tools that facilitate the way we store, borrow, invest, move and pay money. These technologies are often grouped into categories that focus on the fundamental functions of financial services, and include everything from peer-to-peer lending platforms to automated investment advisors, from cryptocurrency wallets and exchanges to stock- or crypto-trading apps, and more.

Traditionally, financial technology has been focused on the back-office systems of banks and other financial institutions. But it’s now being applied to consumer-oriented products and services such as alternative lending, cryptocurrencies, crowdfunding, mortgages, open banking, insurtech, robo-advisement and machine learning applications. In addition, fintech companies are developing aggregator platforms that bring together multiple financial services to provide all-in-one solutions.

Many of the latest fintech companies aim to displace or disrupt established financial services providers by being more nimble, by serving a previously unserved market segment, by offering cheaper or better service, or by making existing services more intuitive and user-friendly. Traditional financial services organizations, on the other hand, are using fintech to help improve their internal processes by detecting fraud, streamlining accounting processes and improving customer-facing activities such as personal banking, credit cards and business loans.

With these changes, it’s important to understand the role that financial technology is playing in our lives today and how it might change the future of finance. To help us do that, let’s look at some significant milestones in the evolution of fintech and how it’s impacting the world we live in.

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