Get to know more about financial technology: its history and types

1bilioner | 15 April 2024
1bilioner - Get to know more about financial technology

The term financial technology is often heard if we are talking about e-wallets, mobile banking, mutual funds, forex trading, and other technology-based investment instruments. For those of you who want to know everything, here the admin will explain what fintech is, its history and types.

FinTech stands for financial technology which can be interpreted as a financial technology that is a form of development innovation in the financial sector so that it can be done more effectively, efficiently, and easily.

FinTech itself was developed because of the demands of changes in people's lifestyles that are dominated by technology-based usage. With the presence of FinTech, problems faced by the community such as buying and selling transactions, not having time to go to the bank/ATM to transfer funds, and others can be minimized.

History of Financial Technology

Quoted from Kompas and GateHub, the history of fintech is as follows:

  1. Fintech 1.0
  2. The beginning of fintech was 1866, when the first transatlantic telegraph cable was laid. This cable made globalization possible from 1866 to 1913.Five years later, in 1918, an electronic remittance system called Fedwire emerged. The 1950s saw a major change in remittances with the advent of credit cards.

  3. Fintech 2.0
  4. The development of fintech in the next period was marked by the emergence of automated teller machines (ATMs) in 1967. The development of fintech was also marked by the development of the internet and computers. Due to the development of the internet, e-commerce began to appear in the 90s. In addition, many internet banking services and online stock sales sites began to appear. This era came to a halt during the economic crisis in 2008.

  5. Fintech 3.0
  6. After 2008, the development of fintech entered the next period. Since the economic crisis in 2008, many people have lost faith in traditional banking. This gap was utilized by many people to create financial service startups, such as online payment services, crowdfunding, online loans, and others.

    n 2009, Bitcoin also emerged as an investment alternative. This era was also driven by the advent of smartphones that enabled mobile banking in the early 2000s.

Types of Financial Technology

  1. Banking
  2. Fintech banking is a conventional bank that is starting to work on the digital world. There is mobile and internet banking that you can utilize easily by involving the internet. Currently, many banks have carried out this digitalization system because they follow the development of smart phones that increasingly support the bank's digitalization system.

  3. Payment
  4. Similar to banking fintech, payments fintech is a financial service that only receives and sends money digitally. To use this service, you don't need to have a bank account. An example of this fintech is PayPal. With this digital payment technology, people do not need to transact face-to-face, making payment transactions more efficient and flexible.

  5. P2P Lending Service
  6. Peer to peer lending service is a type that provides lending funds for business capital or fulfillment of needs. This FinTech is usually used to help business people to obtain capital quickly. However, you must remain vigilant, don't get caught up with illegal FinTech such as unauthorized online loans that have the potential to harm their customers.

  7. Crowd funding
  8. FinTech crowd funding has a system that brings together parties who need funds and donors with guaranteed transactions safely and easily. Crowdfunding is not only used to collect donations, but also to find investors and business people.

  9. Investment
  10. Apart from digital wallets, this type of FinTech is also in demand in today's society. Many investment instruments have migrated through online applications so that investors can easily invest their capital, due to the rapid changes in technology. Examples are cryptocurrency investments, and so on.

That's all that the admin can explain from the history, understanding, and types of Financial Technology, of the many types of FinTech that exist today, which one is the most helpful for you?

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