Fintech Business
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This article has been written by Kezia Shaji, pursuing a Diploma in Cyber Law, FinTech Regulations and Technology Contracts from LawSikho.


In today’s technology-driven world, the term ‘fintech’ has been a fast-growing phenomenon. Fintech is an innovative technology designed to provide financial services. Over the years fintech has been trying to shape the financial sector primarily, the banking industry. The fintech sector is now a multi-billion dollar industry and that speaks for the very fact that the technology is well received by the millennials and the tech-savvy generation. This article gives an overview of the evolution of fintech over the years and its role in impacting the financial sector with the help of technology like blockchain and AI.  

Further, it also explores the recent developments in financial technology and also mentions how fintech would play a vital role in shaping the future of the financial sector and make banking and other financial services accessible and handy to people around every corner of the world and how banks would play the role of a technological firm.

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Development has played a vital role in the evolution of human civilizations. Needless to say technological developments have been a game-changer throughout the years and fintech is one of those. From transferring money to zomato for food to trading stocks online in today’s world fintech is quite literally all around us. The technological companies have realized how people want their financial transactions done as easy as they click a picture or send a text and they have worked towards making that a reality. 

Fintech is now a multi-billion dollar industry only because the technology helps all sorts of industries analyze their information in different ways and makes it easier for the consumers, unlike the traditional banking system. They have made financial services accessible to everyone and are not just limited to an elite group in the society and thereby benefiting individuals regardless of their economic status, geographical location or age.

What is fintech?

Financial technology often abbreviated as ‘Fintech’ refers to the application of modern technologies to the services provided by the financial sector. This includes services such as online banking or cryptocurrencies such as bitcoin. The technology is designed in such a manner that consumers find it easier to connect their finances with technology.  Initially fintech was just restricted to the financial sectors but now it has extended to multiple other applications. It makes it easier for an individual to pay his bills or trade stocks all just with the help of the technology. It also ensures that businesses reach to new customers who they previously couldn’t due to their remote locations. In short, fintech has merged the distinct realm of the offline and the digital world.

Evolution of fintech over the years

Fintech is no such industry that made it big overnight. The industry as we see it today is a result of various innovations throughout the years starting from the introduction of credit cards whose aim was to reduce the burden of carrying liquid cash. This served as a hallmark with the banking industry shifting to digital services. Few years down the lane the ATMs came into existence and eventually the banking sectors started subscribing to more accurate record-keeping

systems. With the advent of online banking in the 1980’s the e-commerce witnessed a huge rise and this proved it hard for the traditional banking systems which used methods like a telegraph to transmit financial information to keep up with the newfound technology since there was a major shift in people’s relationships with the banking institutions. By the 21st century, most activities of the financial sector were digitized. One major reason contributing to this is the increased number of people who have access to smartphones with internet connections which made it even easier to carry on transactions online with the help of softwares and applications like Google Pay and Paytm.

Globalization of fintech

In the year 2020, the global fintech investment will shoot up to a whopping $44 billion that is a 14% rise from the previous year (2019). Although the USA is the largest investor in fintech globally with a contribution of around $22 billion in 2020, Due to the increased industrialization, most Asian developing countries will very soon be the growing hub of fintech. The primary reason behind the global acceptance and growth of fintech is because they help the people who are otherwise unbanked to make use of the application and help them with their financial transactions. 

BBC CEO James Mwangi says that fintech applications like mobile payments serve as a catalyst in breaking down barriers to banking. Further fintech has been playing a role in developing and reviving developing economies like India. India has a large unbanked population and the Reserve Bank of India (RBI) has been striving to change that situation since a good percentage of the Indian economy is derived from the financial institutions and these applications can be availed even by migrants irrespective of the place they are situated in. 

The recent developments in finance and technology

Financial technology has undergone a drastic change to earn the position it is in today. The financial institutions initially tried their luck in e-commerce in order to cater to the hype of the digital movement the world witnessed. Today various banking sectors have been trying to keep up with the latest technology. From managing a business online to paying bills online the process of banking has witnessed a drastic change in the era of technological developments, thereby making the ‘digital’ now the ‘mainstream’. 

The financial sector has been trying to form alliances with the technologies like AI and Blockchain which would help them reduce cost and risks. Robots are designed in a manner that they can identify patterns and navigate and with the introduction of technology like chatbots it is safe to tell that robots will very soon replace the traditional bank teller. Another highlight is the building of technology in such a manner that it gets intelligent enough to cater to the customer’s needs and the companies will have to change their ways of interaction with their clients based on the context of exchange. 

Further, the financial institutions require to step up their cyber-security ensuring that it doesn’t affect their customer base. Blockchain (a database that stores data in blocks that are later chained together) as a public ledger will very soon be a very integral part of the financial sector since they prove to be very efficient and transparent in nature.  Today a good number of financial institutions use cloud-based software-as-a-service (SaaS) for purposes like financial accounting, KYC verification and security analytics. Further regulatory authorities too are trying to adapt to the technology in order to address the potential issues. 

Impact of the fintech on financial services

Digitalization of the financial sector has been a revolution. Banking institutions have always been in search of technologies that would help them improve their customer service and that’s when fintech comes into play. Technology has been helpful in promoting innovation and helping gain efficiency. Their primary aim is to develop the financial services provided to the customers through customer experience management and to reduce the banks’ dependency on branches to function. Apart from the banking sector fintech has also impacted the insurance sector and gone are the day’s people were required to go in person and submit forms to claim insurance. Fintech firms have simplified the job of the investors by introducing the KYC documentation process. 

Online payments using mobile applications are most common and almost every place one goes to from a hotel to a restaurant, accepts digital payments and all this eventually paved the way for the birth of a cashless economy. Although fintech has made it possible for the financial sector in making the procedures easier they still have a long way to go in order to thrive. 

The future of fintech in the banking sector

Fintech today is the backbone of the financial sector and a hub of innovation. With its development over the years, they have been successful in coming up with many virtual applications to help in the growth of financial services. Further terms like AI, cryptocurrency and blockchain are the new buzzwords in the trade media. Consumer relations have slowly started to shift from traditional physical conversations to virtual mediums. Robots today are designed in such a manner that they can generate chat thereby replacing live agents. 

Another matter of hype is the embodiment of blockchain into the financial sector which is known for its transparency and has been widely discussed. Fintech has only been enabled due to people and their adaptation to new environments. Given the frequency with which fintech is growing it is evident that fintech will have its breakthrough in the Asian and African countries and not necessarily stick to America. However, tech giants like Apple and Amazon have already invested in fintech by launching their digital payments application. With every good comes a necessary evil. Cybersecurity has been a topic of concern amidst all the technological development since it acts as a catalyst in building or destroying the application of fintech. Therefore, the governments are required to implement strict and adequate legislation to regulate the data protection policies.


The factor underlying all technological development is the ability of human beings to adapt to change and fintech is the result of one such human ability which encourages innovation. Fintech and banking together have joined hands to revive the financial sector by helping shape a better future of the financial sectors by helping both the banking sector and the customers at the same time. They help provide features that can be integrated with banking platforms with the help of various applications. 

The financial structure has been shifting to an entirely new paradigm that will have to deal with everything from digital identity to digital sovereignty. Fintech services will very soon become omnipresent in the banking sector and in fintech start-ups by providing a wide spectrum of financial services. However, fintech will face a backlash if the banking sector faces any sort of disruptions. The very presence of fintech companies has paved the way for financial inclusion thereby making banking services more accessible and easier. 

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