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Fintech: Trends of the Future

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Fintech is a term that has been coined by Peter Knight, an editor for the Sunday Times business newsletter in the 1980s, however, the term was fully adopted as a common term as recent as 2007. Fintech is a combination of two words “financial” and “technology”. Hence financial technology, in its core, is the set of algorithms and software that is utilized to provide financial services to consumers to better manage their financial operations and processes, establish new channels for transactions, and much more.


In the early 1960s through the mid-2000s, fintech was essentially the shift from pen and paper to a digital data system. A few milestones happened along the way, notably, the establishment of NASDAQ which is the world’s first digital stock exchange, and the world’s first ATM machines for depositing and withdrawing cash on the go.


In 1973, SWIFT (Society for Worldwide Interbank Financial Telecommunications) was established, set to be the world’s most used protocol for cross-border transactions. Yes! that’s the SWIFT code every bank account has.


The development of Fintech was closely associated with other breakthroughs in computer technology, where the 1980s saw the development of the world’s first mainframe computer which enabled online banking and e-commerce.


By the beginning of the 21st century, the world’s banks’ internal processes, interactions with outsiders and retail customers have been fully digitalized. However, the year 2008 is marked in history as one of the largest global financial and economic crisis in modern history. Banks have lost their trust from the public, putting a lot of financial professionals out of work, consequently paving the way for a new industry called Fintech 3.0. A lot of innovations emerged with Fintech 3.0, such as the infamous bitcoin, which was developed by the mysterious Satoshi Nakamoto. This industry boomed, paving the way for more cryptocurrencies to follow, such as Ethereum, Litecoin, and thousands of others.


The mass market penetration of the smart phone in the early 2000s, massively shifted the way we do finance, banking apps, investment apps, stock exchanges, and in 2011 Google Wallet (a digital wallet that allows you to do online transactions in select countries such as the USA), followed by Apple Pay in 2014.


Fintech has been in an ever-growing innovation and adoption throughout the years leading up to today where financial services are as easy as the tap of a button. But it doesn’t stop there, Blockchain, the technology that enabled Bitcoin to exist is enabling Big Tech companies and startups to adopt a new form of doing business, you guessed it, the Metaverse.

What is Blockchain?

Before we dive into the Metaverse, let’s explain the Blockchain. The Blockchain is a form of a digital database that is stored in a decentralized way, over computer nodes in its network. The main difference between a conventional database and a Blockchain database is the way data is structured. Unlike conventional databases, a Blockchain stores information in blocks that have finite capacities, once full, closed and moved on to the next block in the chain, hence the Blockchain. Also, the Blockchain is considered very secure with Secure Hash Algorithms in its many forms such as MD5, SHA256, and SHA512.



What is the Metaverse?

The Metaverse is a virtual reality, life beyond the physical world as we know it, a dwelling for people to socialize in a modern sense. Key companies are adopting the metaverse since the start of 2020, companies such as Facebook which rebranded itself as Meta, Google, Apple, Nike and Adidas selling NFT collections of shoes, as well as public figures and celebrities such as Gareth Bale with his new NFT collection, and Snoop Dogg who did a very successful virtual concert in the Sandbox (The Sandbox is a Metaverse application where people develop virtual worlds and dwell in them).

Why is the Metaverse so Important?

The Metaverse marks a new era for humanity, an era where the physical world is no longer the limit of doing business, or living, if that makes sense. Virtual, but real, in some sense, it might be disturbing for some people, but it is a fact. The Metaverse is being adopted as the new market, the new world, a world shaped by humans, adapted for humans, to live and do business in. This might seem far-fetched, but who would have thought we would have computers today anyways?

What are NFTs?

With the emergence of NFTs (Non-fungible tokens) or non-replaceable tokens, basically, every digital asset is endorsed in the name of its owner, digitally signed, and one of a kind. This is a trend which has boomed beyond 2020, a year marked by COVID-19 and the social restrictions that came with it. A new market has emerged, the NFT market which is not yet mainstream to everyone, but is very likely to become.

Although, here at Netiks, we have not delved into the Metaverse yet, the technology and the possibilities in the Metaverse are endless. We are looking forward to seeing what this new trend brings with it to the financial markets of the world.

To conclude this article, the history of Fintech is recent, very recent indeed in the grand scheme of things, but the innovation is rapid, very rapid that humanity has reached a new era in a matter of less than a hundred years, an era we call the Era of realization of Virtual Reality.


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