All Aboard? 25 Years on the Fintech Train
The year is 1999. The dot-com boom is in full swing. Companies scramble to grab available domains to get their presence initiated online and see their publicly traded tickers soar multiple-fold within days—only to see it deflate in the bust that ensued in Q1 2000.
PayPal (starting out as Confinity in 1998) had marked a turning point in the financial landscape, changing the way people all over the world made online payments.
Meanwhile, I was right in the midst of getting leading banks initiated on their early journey towards online banking. A majority of these banks were scrambling to set up an ecosystem encouraging millennials to open new online bank accounts to begin their journey into FinTech, attempting to replicate the success of initial movers like Wells Fargo and ING Direct. It was exhilarating to enable some banks to do so very effectively. At the same time, a handful of new startups in online banking faded away as they compromised on their risk standards in exchange for exponential growth new account openings.
In the 2000s, technological advancements showed no signs of slowing down and with this came the advent of blockchain technology and the first stable cryptocurrency, Bitcoin. It also saw the development of new forms of funding like peer-to-peer lending and crowdfunding.
In the last decade, FinTech innovation has really come into its own. We don’t think twice today before using Venmo to pay the cleaning lady or the hairdresser. From the introduction of mobile payment technology in the form of Apple Pay and Google Wallet to the use of biometrics and artificial intelligence (AI) in banking, the FinTech revolution is already reaching record high numbers.
We also began to see banks and FinTech’s developing lucrative partnerships, as both sides realize the value of working together and how this will ultimately offer better, digitally-enabled services to customers.
The FinTech sector has gone from strength to strength over the last five years, as evidenced by the growing number of FinTech unicorns – those valued at over $1 billion (USD) – in existence. Currently, there are more than 30 worldwide. The strides that FinTech has made in the same period have been astounding, to say the least, with recent tailwinds pushing FinTech activity to record highs. The shift toward digitization and online channels in the financial services industry further accelerated over the past year since the pandemic, boosting FinTech companies that predominantly operate within digital ecosystems. This led to a near-record high in the first quarter of 2021, with VC-backed FinTech companies globally raising a combined $21 billion.
Watch for more in this series as I continue to cover additional ground in the burgeoning FinTech landscape and get direct perspectives from leaders across both B2C and B2B.
