Figuring out fintech: things you should know

Let’s face it: the world of finance is no longer what it was 10 years ago, even in a developing nation like Malaysia.

This is especially evident through the introduction of fintech, a force that continues to revolutionise the way we deal with our finances on a daily basis.

But before we proceed to make more claims about fintech, what exactly is ‘fintech’? More importantly, how much of it do we actually understand?

Fintech defined

Put simply, ‘fintech’ is literally a marriage of the terms ‘financial’ and ‘technology’.

It refers to financial services that are offered using various forms of modern technology and do not require much or any real-life interaction between parties.

Fintech also refers to businesses that offer such services. Here’s a fun fact: did you know that Malaysia is the home of at least five FinTech companies that are valued at more than US$ 1 million?

The fintech game

Fintech entities aim to disrupt the world of finance by completely changing the way in which we handle our finances. They can range from innovations in business-to-business (B2B) transactions to the manner in which we personally save our money.

For example, mobile banking has transformed the way we manage our money, while e-wallets are disrupting the traditional way of making cash payments. It isn’t a small-scale disruption either, the mobile banking transactions of Maybank alone clocked a total value of RM1.2 billion in 2017.

Popular fintech entities

Many of us are more intimately acquainted with Fintech entities than we realise.

Cryptocurrency, for instance, is rapidly increasing in popularity across Malaysia. This digital currency is commonly used as an investment or in online transactions, although some local physical stores have begun accepting payments via cryptocurrencies.

Another fintech advancement that is quickly gaining momentum is the digital challenger ‘bank’. Think of it as an online bank that provides you with products and services that literally challenges what traditional banks are currently offering today.

Now that you better understand the excitement surrounding fintech, go ahead and learn how you can use it to your advantage!