Banking fundamentals refers to the concept and principles along which the banks work. It involves dealing with credit facilities, storage for cash, investments, and other transactions. The figures in usage are huge and hence require use technology to compute. Financial technology or Fintech refers to the financial solutions that are technology-enabled. It is known as the blend of financial services and information technology. The blending of finance and technology may appear to be recent, but Finance and technology have been together from the start of modern society.

History of Fintech:

Technology is of vital importance in the financial sector. The guided timeline details the evolution of Fintech and its impact on the banking fundamentals stage wise.

Fintech 1.0 (1886-1967) is the tale of infrastructure- It is in this dynamic era the financial globalization started. The world saw technological advancements like the telegraph, railroads, and steamships. The period is characterized with the first ever rapid transmission of financial information across borders. The period featured the first transatlantic cable (1866) and Fedwire in the USA (1918) as well as the first electronic fund transfer system using the present-day non-archaic technologies like the telegraph and Morse code. The 1950s saw the emergence of credit cards that eased the trouble of carrying cash. Diner’s Club get the credit of the introducing it, followed by American Express in 1958.

Fintech 2.0 (1967-2008)- the era witnessed shift from analog to digital, and the traditional financial institutions initiated it. The Barclays bank installed the first handheld calculator and the first ATM. After that, from 1967, the era of modern banking started. In 1970, several revolutionary changes were instilled, like the establishment of NASDAQ, the world’s first digital stock exchange. It paved the way for the working of the modern-day financial markets. In 1973 SWIFT (Society for Worldwide Interbank Financial Telecommunications) was established. The process was highly dynamic, and it was the first and most popular communication protocol used between financial institutions. The method is mostly used for large volume cross-border payments.

The 1980s witnessed the rise of bank mainframe computers, and the era saw the introduction to online banking. It further flourished in the 1990s with the advent of Internet and e-commerce business models. Online banking is one significant milestone in the thought process of people and how they perceive currency. Moreover, it showed a new face of the relationship between financial institutions and its clients. With all these rapid changes, the training of banking personnel’s have become mandatory. At the beginning of the 21st century, the banks went digital, and all the banks’ internal processes, interactions with outsiders, and retail customers were fully digitalized. The Global Financial Crisis era ended in 2008.

Fintech 3.0 (2008-current)- the era saw a distrust in the traditional banking system, and several financial professionals were out of work. This led to a change in the mindset and paved the way towards a new outlook of the industry. The era marked the beginning of new players along with the existing banks. The release of Bitcoin v0.1 in 2009 was another revolution in the banking world. Several different options of cryptocurrencies emerged. In 2018 there was the emergence of smartphone-enabled internet access for millions from all over of the globe. In 2014 services like Google Wallet and Apple Pay came into existence bringing banking from branches to fingertips.

Fintech in emerging markets- mobile phones have changed consumer behavior and how people access the Internet for their banking requirements. With the digital world, Fintech has evolved, and adoption has become widespread. Technology is becoming more central in the finance industry.

The process of evolution is still rolling, and we at The Academy of Bankers are continuously upgrading our training modules to match the pace of evolution and extend the best-designed modules to our clients. The important aspect here is that the institute incorporates training modules for traditional and new-age fintech and technology enhancement with a balance of risk approach.