The world of FinTech; a layman’s review

Posted on the 10th October 2016 in SME blog

foreign exchange costs are reduced by being less greedy

Money Mover has been a member of CW (Cambridge Wireless) since January 2015 and it’s great to work so closely with a Cambridge FinTech start-up. Both the Partnerships Manager, Amanda Nunn, and Marketing Manager, Susan Curtis, are very vocal with various CW activities which is great. As a networking and events company, we rely on our members actively engaging with our events and digital marketing activities.

Financial Technology aka FinTech has remained a blurry subject, parked firmly outside of my understanding! So when Susan asked if I wanted to guest blog for them…I decided it would be a good opportunity to do some extra research and see about shifting that parked car.

So here goes. As I understand, FinTech is all about using technology to improve a financial process or service. By ‘improve’, I don’t just mean to reduce the cost (though FinTech has been stunningly effective at passing on cost savings realised through aggregation, automation and, well, just being less greedy). No, improve means to re-imagine or re-invent a process, to simplify it, make it more engaging and functional.

FinTech can be split into various boxes such as payment solutions, peer-to-peer lending, crowd funding, payroll solutions and so on. All are targeted for different business processes. So Money Mover, for example, is revolutionising the way businesses make international payments, Bango has created software to make digital content sales seamless, Funding Circle has created an online marketplace for investors to choose which type of business they choose to lend to for what return. ‘’FinTech’’ was a hot topic buzzword last year, everyone was writing about some new start-up with a new disruptive technology. According to KPMG, financing for FinTech start-ups reached over $20 billion; a 66% increase on the year before. PWC released their 2016 Global FinTech in March which presents some interesting insights; 83% of financial institutions believe they will be disrupted and ‘at risk of being lost to stand alone FinTech companies’. FinTech is a booming beast!

Investment in FinTech is on the rise and the International Finance Corporation (IFC) estimates that there are 125 million small businesses throughout the world where cash flow is the lifeline for their success – so big opportunity for FinTech to make its mark.

Flipping this on its head then, controversially, what happens when a third-party software supplier is removed? Welcome to the world of blockchain. Blockchain – which is also known as distributed ledger technology – consists of a series of linked databases which use maths and cryptography to make them tamper- and unauthorised edit-proof. Thus, the information stored within them is guaranteed to be reliable and accurate. Distributed ledgers can be used to maintain a database of bitcoin transactions, where bitcoin can replace currency. Soon, perhaps, we’ll be paying our taxes using blockchain technology.

OK, so admittedly I still need to read around this area of FinTech to fully appreciate its value in our society but blog-by-blog, I’ll get there. 

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