N-582543-B LR DATA .docx - Running Head: FINTECH Social...

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Running Head: FINTECHSocial Implications of Financial TechnologyStudent NameInstitution Name
FinTech2CHAPTER II: LITERAURE REVIEWFintechFintech, a hybrid word that unites finance and technology, represents the collision of twoworlds – and the evolution of the use of technology in financial services. Financial services andtechnology are joined in a strong bond, and this union brings both disruptions and synergies.Fintech is a business concept that revolutionizes the financial market on a global scale as itdefines those financial services that use technology to make life easier for the client and improvethe user experience. That is, online credits, currency exchange through the network, onlinepayments, digital banking, among other services. You do not have to be a magician to define thatit is about the products or services that coincide in technology and money. Fintech companieshave shown that there is another way to manage clients' money, a faster, more comfortable andtransparent way, as Zaimo.es explains. Its strength is in offering faster solutions, with fewerresources and using less money.Financial institutions are getting involved with new financial technology startups , eitheras investors or through strategic partnerships. Nearly 80% of financial institutions have partneredwith fintechs (financial technology companies), according to McKinsey Panorama. Meanwhile,global venture capital investment in fintechs has already reached $30.8 billion in 2018, comparedto $1.8 billion in 2011.
FinTech3Average transaction size has also been growing, particularly in Asia , where it is nearlydouble the world average, largely due to a series of mega-deals.1 The investing public is also inlove with fintechs : Zhong An made an impact last year with an $11 billion valuation in its IPO,and Ant Financial is said to be running a pre-IPO round that will provide the company with a USvaluation $150 billion.However, the total investment figures hide a more subtle set of developments. “ Fintech ”covers a range of different models. We see four distinct variants, each operating in differentniches and with different modus operandi (Table 2):
FinTech4Fintechs who are new entrants, startups and attackers who intend to enter the financialservices business using new approaches and technologies . These companies seek to createeconomic models similar to those of banks, often targeting a specific niche or product. The mainchallenge for fintechs in this group is the cost of acquiring customers.Fintechs that are established financial institutions and are making substantial investmentsin technology to improve performance, respond to competitive threats, and capture investmentand partnership opportunities.Fintechs which are ecosystems run by large technology companies that offer financialservices both to enhance existing platforms (eg AliPay supporting Alibaba's e-commerce offering) and to monetize user data or relationships with current users. Due to the high degree of

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Term
Summer
Professor
Dr. Sajid
Tags
Financial services, Fintech

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