Fintech a win for consumers
Financial technology (fintech) describes the use of new technology which improves and often automates the delivery of financial services.
For developing nations, it can allow traditional and non-traditional banking providers to create innovative financial products and assist non-banked and under-banked consumers to benefit from a vast array of online services.
Whilst some people think of fintech as the creation of cryptocurrencies, such as bitcoin, there is so much more to the innovation taking place which allows people to transact with business and government, often via mobile smart devices.
Not only are incumbent banks seeking new business opportunities in fintech, but start-ups are disrupting the market seeking to expand financial inclusion by using technology to cut down on operational costs.
Notable announcements have been from the Libra Association (though more recently key organisations such as Visa and MasterCard have withdrawn) with a blockchain-based crypto currency expected to launch in 2020.
Libra is said to be built on a secure, scalable and reliable blockchain, backed by a reserve of assets and governed by the Association.
People will be able to send, receive, spend, and secure their money, enabling a more inclusive global financial system.
How it is received by global regulators is yet to be fully determined, though early indications are not good.
Traditional banking relies on financial services companies holding a licence (something the Libra Association will need to tackle).
The creation of regulatory sandboxes are a safe way to enable emerging fintech ideas, whilst providing a degree of assurance to national governments and consumers.
Global fintech in the first half of 2019 was $37.9b accounting for 962 deals.
Of this, $3.62b across 102 deals were in the Asia Pacific.
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