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Fintech

Financial technology also know now as Fintech is beginning to change the entire financial landscape. Fintech comes with a whole new set of terminology such as bitcoin, Blockchain, Alt–Coin, Etherium and others. Fintech is starting to disrupting many financial systems and legacy companies that rely less on software. It relies on disruptive technologies that innovate applications and processes in the financial services industry.

As Fintech gains an increasing hold in the financial markets, companies are scrambling to implement new technologies to take advantage of all that Fintech has to offer. Many organizations are taking a hard look at Blockchain technology that lowers the friction inherent in common financial transactions today. This is accomplished by using a peer-to-peer transfer system that eliminates the middlemen using the crowd to verify transactions. Since the Blockchain is a distributed ledger, it is accessible by everybody and nobody controls the Blockchain. It provides absolute transparency to any transactions that have occurred using it. It is now considered the next great disintermediation.

Fintech

It is even becoming a threat to some new technologies such as Uber because it would eliminate the need for an intermediary between drivers and passengers. Large financial institutions are both intrigued by the technology and also frightened by it because on one hand it is very secure and has low friction lowering costs but on the other hand it threatens to make them irrelevant.

Fintech using Blockchain can remove all the back-office processing that is needed on everything from mortgages to credit card processing and reduce the time it takes to clear transactions. This can save companies billions of dollars.

Many financial companies are primarily interested in a private version of the Blockchain which they hope can increase transparency for some uses but also maintain privacy for others who may need it. The public Blockchain has some definite hurdles it needs to overcome since it is decentralized. This makes it much more difficult to come to a consensus on changes to the infrastructure to help it grow and flourish. This is been a big stumbling block for bitcoin over the last few months as the Blockchain of bitcoin is running up against some limits that need to be addressed for it to move forward. There are several camps that are at odds with each other over how to accomplish this.

Fintech holds much promise for many but also can be an existential crisis for some sectors as it becomes a greater force in the financial world. As with any disruptive technology there will be winners and there will be losers.

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