The Fintech Sensation - What is it about?

Abstract

The years following the 2008 financial crisis have been characterized by the emergence of new financial service providers, called fintech. The term is defined and understood differently in the literature. There is an agreement that fintech is composed of the words "financial" and "technology". Regarding the different views and definitions, there is great heterogeneity in the literature and this article tries to systematize them. Furthermore, different justifications for its existence are examined and a proposal for categorization is made. Argumentatively, various opportunities and risks are highlighted that arise in connection with Fintech. Finally, various ideas and starting points for further research are derived from the arguments. Keywords: Fintech, Tech innovation, Financial technology

Moving Beyond Silo Thinking: A Deductive Analysis of Financial Literacy, Financial Inclusion, FinTech, and the UN Sustainable Development Goals

“…Despite the contemporary nature of the fintech concept, its origins can be traced back over 150 years (Treu, 2022a(Treu, , 2021. Technological advancements in the 19th century were already being utilized to enhance the efficiency of financial business operations (Nathmann, 2019;Arner, Barberis, & Buckley, 2015).…”

“…The origins of the term FinTech can be traced back to the Financial Services Technology Consortium, which was initiated in the early 1990s by what is now Citigroup (Treu, 2022a(Treu, , 2021Ratecka, 2020;Keré nyi & Molná r, 2017;Arner, Barberis, & Buckley, 2015). This project aimed to address the bank's reputation for resistance to technological collaboration with external entities (Hochstein, 2015).…”

“…Despite almost three decades since its inception, the term has been understood in various ways (Allen, Gu, & Jagtiani, 2020;Rupeika-Apoga & Thalassinos, 2020;Elsinger, Fessler, Feyrer, Richter, Silgoner, & Timel, 2018;Schindler, 2017). Different perspectives have emerged, emphasizing either a technology-oriented focus, a functional-oriented focus, or a combination of both (Treu, 2022a(Treu, , 2022b(Treu, , 2021. For instance, the ECB (2020) adopts the former perspective, defining fintech as financial technology and an umbrella term encompassing any technological innovation used to change, support, or deliver financial services across various applications.…”

“…This neologism refers to the integration of technology into the offerings of financial services firms to enhance their usage and delivery to consumers. This etymological understanding represents the minimum consensus across all definitions and perspectives (Treu, 2022a(Treu, , 2021.…”

“…The arguments and reasons for the emergence of FinTech are just as numerous as the various definitions and perspectives. It is precisely this prevailing heterogeneity that is responsible, among other things, for the fact that there are many different justifications for the FinTech phenomenon (Treu, 2022a(Treu, , 2021. Examples include the excessive costs of financial intermediation, a less competitive banking sector, and the current low interest rate environment.…”