The word “fintech” is quite new. It stands for “financial technology.” It’s one of the new developments brought about by the internet, the spread of smartphones, data science, and the digital revolution in general. The idea is to harness the power of digital technology to empower financially those who have been traditionally left out.
It brings financial services to those who don’t qualify for a bank account, for instance. Maybe Paypal is the best example of a thriving fintech service, but it’s not the only one. Tala is an Indian institution which facilitates microloans through a mobile app to those who would never get one from a bank. The fintech movement is most active in Subsaharan Africa, some zones in Asia, Latin America. In general, it thrives where banking services are too scarce or too expensive.
The financial establishment was quite skeptical about fintech in the beginning. That’s not surprising. It’s an industry always reluctant to change or update its ways. Inertia is too strong. Also, it hates competition.
The writing is on the wall, however, and even banks are starting to accept the fact that they will have to read it. That’s how finances will be in the new century. Given the right strategy, the traditional system could even profit from fintech, so some players in the industry are looking for ways to embrace the new developments and make something out of them.
That’s why the World Bank (Vienna Financial Sector Advisory Center or FinSAC) is hosting and organizing a two-day conference on fintech in Vienna, Austria. It will take place on May 22nd and May 23rd.
The World Bank wants to bring together the world’s central bankers, regulators and supervisors, academics, and relevant equivalents in the private sector to talk about fintech and exchange their expertise and views. All in the belief that such an interaction will help to increase the understanding of fintech.
The agenda includes topics such as regulatory and supervisory reactions to the fintech industry; suptech and regtech; the operational risks involved in fintech; distributed ledger technologies (blockchains); and the evolution of retail lending among others.
The topics will be treated in eight sessions spanning the conference’s two days. They will be formatted as moderated panels, mainly. Emphasis will be on real-life cases and/or displays of representative products in fintech. Also, discussing trends, new opportunities and problems are on the cards.
This won’t be a public event. Attendance is by invitation only, and it seeks to invite the heads (or deputy heads) of IT payment systems, risk management, financial technologies, and supervision.
The world’s banks are still very far away from accepting fintech or harnessing its power. They’re too set in their century-old ways. But the Vienna conference is a step in the right direction that could, in time, bring banks and fintech together in a way that will, hopefully, benefit more users all around the globe.
Fintech is all about leveling the field for those who have been left behind in the past. It’s about making financial services more egalitarian, democratic, and useful. In that regard, it’s not in competition with any banking system as it serves a demographic that the banking system doesn’t want at all. But collaboration between both would be a fascinating development for the world as a whole.
[Image courtesy of PixaBay]