Fintech refers to financial technologies applied to the financial sector. Technology in finance has been around a long time but what’s new, is that lots of new players enter the pitch who are changing the rules of the game.
In the past, financial services were provided by financial services firms. The game was clear, all teams played along just fine, but the audience got a bit bored as nothing exciting happened.
During the financial crisis, we learned that not everything within the financial sector was as rosy as it seemed. Scandals emerged, bribery, and corruption came to the fore. The conceit shocked the world. As a result, people lost trust and wondered if the finance game would ever be fairly played again. The established financial players faced regulatory pressure, improved their internal processes and controls and started to comply with new and tougher rules.
Focused on internal issues and cost-cutting, incumbents lost sight of what happened around them. In their blind spot, thousands of new players qualified: fintech startups joined the World Cup.