Financial technology, also known as Fintech, has been around since the 7th century BC when the abacus was first used. Since those early days, innovation in the financial sector has continued to result in new technology and ways of working, which have transformed the sector into a fast-moving, digital environment.
The Inca used a Quipu (above) to manually keep track of transactions, records and information through an intricate cord and knot system – up to 15,000 pieces of data. When the first transatlantic cable was laid in 1886, the foundation for electronic payments was set. The subsequent introduction of Fedwire, in the US, in 1918, provided an accessible method of electronic money transfer. Moving forward to the 1950s, the introduction of credit cards marked a departure from using cash to pay for goods and services.
Introduced in the UK in 1967, the ATM represented a way that individuals could input information electronically in order to get cash when they needed it. Previously, cash could only be obtained during banking hours.
The 1970s was the decade that the stock market really began to adopt fresh technology. The Nasdaq stock market launched in the US in 1971 and provided the first opportunity for electronic securities trading. Other developments included the introduction of SWIFT Business Identifier Codes (BIC)s. These allow institutions to be quickly identified, facilitating digital messaging and transfers.
1980s and 1990s
In 1984, Eftpos technology began to be used in Australia. Initially adopted in BP garages, Eftpos allowed customers to pay for their goods electronically at the point of sale.
In 1994, the Microsoft Money personal software, provided the first facility for users to access their bank accounts electronically. This development was a pivotal one, with other providers quickly bringing online banking into the mainstream.
Technology for enabling electronic payments continued to develop. In addition to the introduction of PayPal in 1998, the development of chip-and-pin technology in 2005 contributed to improving the security of electronic financial processes.
2009 was the year which saw a significant advance in the digital banking world: Bitcoin, the world’s first cryptocurrency, was launched. Other crypto offerings followed, although Bitcoin remains the most well known digital currency for Australian investors.
A burgeoning demand for digital currency, alongside increased digitisation of the banking industry, was complemented by the development of apps for trading shares in 2013. As the second decade of the 21st century continued, apps were developed for everything from making payments through to mobile banking.
Recent fintech innovations include neobanks, introduced roughly around 2017. UBank, ING and EasyStreet offer a complete digital banking solution. Trials of China’s digital Yuan bring the technology needed to move towards an entirely cashless society one step closer.
Qoin was launched in early 2020 as a progressive digital currency. A utility coin, it has an ecosystem of merchants and consumers who use Qoin as an alternate payment method for goods and services.
Accelerating numbers of Fintech start-ups, including large numbers of Fintech companies that quickly grow into billion dollar institutions, show that there is enormous demand for fresh developments in this exciting, fast-moving sector.