Home Finance What is Fintech? Guide and Future of Financial Technology

What is Fintech? Guide and Future of Financial Technology

Have you ever been in a long line in banks, and other financial companies to pay or receive money? 

In the old banking system, we have to visit banks by ourselves to receive and deposit money but today the concept of Fin-Tech made this boring and time taking work easier and simpler. 

Fin-Tech is a buzzword which is the combination of finance and technology. Moreover, technology and finance are the two main and biggest market of today’s world, that makes fintech as the significant market for the world economy. 

With the continuous growth in technology and information technology, the finance sector has also merged with technology to make fintech, which significantly impacting in human life and finance sector in the past few years. So, here we are going to learn about financial technology.

We are going to cover:

  1. Introduction
  2. Evolution of Fin-tech
  3. Future of Fin-tech
  4. Fin-tech in India
  5. Conclusion
  6. Frequently Asked Questions


Fintech or financial technology is the innovative use of technology to provide financial services. Financial services include all those services that belong to the money, like banking, insurance etc. The fintech industry is one of the rapidly growing industry in today’s world. The main motto of the fintech is to change the traditional ways of providing financial services to the people. Hence, the fintech industry uses the latest technologies and software to provide quality financial services to the people. 

Picture is showing money and a hand is writing fintech on a board.

Use Sector of Fintech

Generally, fintech is using in the sectors of banking. With the use of fin-tech sending and receiving money is becoming easier. The concept of mobile banking helps the banking industry to become more transparent and easier. Fin-tech also uses in the sector of insurance, fundraising, investments etc.

Many companies are working on the field of fin-tech in the different vertical of finance. Such as PayPal, Alipay, I-pay etc. are working on mobile banking and payment services, and trading company like E*TRADE are working on investment sectors. All these are part of financial technology. 

Another sector of financial technology is a cryptocurrency like bitcoin. Cryptocurrency is totally digital currency. Cryptocurrency is a great example of a mixture of technology and finance to make a better service. Without technology maybe there is nothing like cryptocurrency.

Evolution of Fintech:

The fin-tech seems to be new but the fintech is evolving throughout the industrial and technological revolution. All those technologies that have helped in the finance technologies throughout the time are considered as the fintech. In the timeline of history, fintech is classified into three categories as fintech 1.0, fintech 2.0 and fintech 3.0. 

an infographic showing evolution of fintech

Fintech 1.0

This is the period of 1886- 1967. This was the period of the industrial revolution. The infrastructure technologies developed in that time makes easier to provide financial services across the border. The era started with technologies like telegraph and Morse code, which allow communicating in long distance.

With the help of these technologies, transatlantic cable in 1866 and fed wire in 1918 developed which allow for the first time to rapid transmit of financial information across the border.

Similarly, in 1950, the new technology called credit cards replaced the paper currency. Credit cards gave relief to the burden of carrying money in the pocket. This is all bout the first version of fin-tech.

The picture is showing credit cards. Credit cards are on of the revolutionary innovation in fintech sector
Credit Cards

Fin-tech 2.0

 After the first evolution period fin-tech, the second period had started from the year 1967 to 2008. This was the period of banking evolution. At that period, for the first time, ATM (Automated Teller Machine) was installed in the year 1967 by Barclays bank which started the age of digitalization in the banking industry. 

In the year 1971 NASDAQ established which was the world’s first digital stock exchange platform. It was the beginning of electronic trading, financial market and IPO that we know today. 

Similarly, in 1973, a cooperative organization called SWIFT has been formed by 239 banks from 15 countries. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. This organization regulates all the digital payments through across the border. Till this day SWIFT is the first and most used communication protocol between financial institutions cross-border money payment. 

From the year 1980, the world has introduced to the online banking system with the rise of internet and internet users. The online banking system has made payment system easier and more transparent among the users. 

This era ended with the great financial crisis of 2008.

A picture is showing a laptop in which page of online banking is showing which is the vital part of fintech.

Fin-tech 3.0

From the year 2008 to now the fintech revolution 3.0 is going on. The internet was booming before 2008 and in the year 2008, the world has faced a great economic crisis.

But this economic crisis taught many things that have to be improved about the traditional finance system and started new evolution in the finance sector with the help of technologies. This period of time is all about the new players alongside with banks in the market which has changed the way of providing financial services.

Just after one year of the financial crisis, the first version of bitcoin v0.1 has released which had a major impact in the finance sector. It was the first digital currency in the world and soon it started booming all around the globe. Nowadays, people invest a bulk amount of money in bitcoins though there was a great crypto crash in 2018.

Since, due to the mass development in mobile phones, the number of mobile devices users have dramatically increased in the past few years which enable internet access to everyone around the globe. Smartphones now became a crucial part of human life. So, nowadays, different payment gateways have introduced into the market which enables payment of money through their smartphones.

In the year 2011 google launched google wallet and in 2014 apple launched its Apple pay which is some of the platforms for the easy mobile payment services. Similarly, many different companies have established in the past few years who provides financial services just only from the use of our mobile phones. 

The new companies and platforms are being established today also. That’s why this era is also called as the fintech startups period, where numbers of billions of dollars startups have started and are still starting. 

This picture is showing two hand and a bitcoin. this picture specailly shows the value of cryptocurrency. Cryptocurrency is the new and innovative part of fintech.

Future of Fin-tech:

Today fintech is an emerging market. In 2018, more than 40 billion dollars have invested in the fintech sectors and there are more than 40 unicorn startups in the world related to fintech. Also, the top ten companies in the world are related to finance and technology. Further among them, 7 are tech companies and 3 are finance companies. Hence, this shows how fintech is developing and what is the future of fintech.

The banking experience of people has never been good in past. About 2 billion people are still completely unbanked in the world whether in developed or undeveloped countries. It is because people have a very bad experience in traditional banking services.

So, with the help of fintech, for the first time, we can able to provide financial services to those people who have not to get it till now. People nowadays are shifting towards these fintech startups for the transaction of money rather than traditional banks. In the last few years, according to the world bank, more than 700 million people are shifted to banked from unbanked.

picture is showing the different technological icons.

The future of fintech is astonishing. With the adoption of new technologies, fintech is going to boom in future. Technologies company like apple, google, Facebook has started to provide financial services.

In future, the children will go to make their first bank account from Facebook rather than traditional banks because it will be easier. Just you need to click a button on your mobile phone.

In the future, there will not any financial institution but there will be the robotic (chatbots) advisory platforms which will offer customer asset management services more transparently and cheaper. Also, the robotic system and chatbots will replace investment brokers and consolers of personal finance which can give more detailed and thorough information to the customer easily. Further, AI and software will automate most of the financial services. 

Problems with fintech in future

But there will also the problems that we are going to face in the future of the financial revolution. The main problem will be jobs. According to data, over the next few years, about 30%-50% of jobs related to finance will be going to disappear because of the automation in the finance sector.

The future jobs of the finance sectors will not for traders or brokers but for the designers, programmers and creative thinkers. So, we have to flourish our next generation for the adaption of the future of finance with technology.

Fin-tech in India:

In the past few years, the fintech is booming in India. Moreover, after the demonetization of 2016, there was a great burden in normal consumer for traditional payment services. they had to face a lot of problems in payment. Then the company called Paytm has played a great role in that time to provide financial services easily. After that, a lot of other startups have started in the market nowadays.

Today more than 87% of the country has adopted the digital payment systems and 99.5% of the country is now aware of the financial services platforms. 

Government of India is also encouraging Indian people to use digital methods for payments and transaction through their digital India initiative. Also, the main reason to grow fintech in India is the availability of internet in cheap price. 

It is estimated that Indian fin-tech market will grow $65 billion in 2019 to $140 billions market. 


To sum up, in this blog we have discussed the financial technology and its future. We have discussed that there are three stages of the fintech revolution. Also, we have learned that fintech is going to change the future of banking and other financial services with the help of latest technology like AI and machine learning. Also, India is also growing in the finance sector with the use of technology. Overall, fintech can revolutionize and shape whole financial services to make it easier and accessible to more people.

Frequently Asked Questions

1. Are we in fintech bubble?

Many of we think that maybe the fin-tech is only hype. Does fin-tech mania is going to burst? Possibly not. Because research has shown that there is a massive decline in fintech startup in the last 4- 5 years. It has declined from 390 in 2015 to 71 in 2018.

2. Why fintech is future?

Fintech is the future of banking and other financial services because, with the help of technology, it can provide more financial services easily, in a short period of time to a large amount of customers using very few amounts of equipment.

3. Which country has most number of fintech startups?

According to the latest statics of 2020, the USA has the most number of fintech startups. It has 8,775 startups where Europe, the Middle East, and Africa jointly have 7,385 such startups. Similarly, the Asia Pacific region has 4,765 such startups.

4. What are the Top ten fintech companies?

The top ten fintech companies are given below
1. Ant Financial
2. Adyen
3. Qudian.
4. Xero.
5. SoFi.
6. Lufax.
7. Avant.
8. ZhongAn
9. Klarna
10. Oscar


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