How Fintech has changed the Banking Industry


Don’t let the phrase ‘Fintech’ scare you off from reading onwards. Fintech simply stands for Financial Technology. The term is quite broad, including elements from cryptocurrency, financial education, trading to retail banking.

This may sound like a phrase that is only relevant to big name banks and early adopters of new technology, but Fintech is everywhere and really taking shape through “start-ups”.

Whether aware or not, you are more than likely already using a Fintech product or service. If you have ever used a mobile banking app or a smart ATM – that is Fintech.

Fintech is technology designed to make financial services more accessible and simple while counteracting traditional financial methods of interaction. This is not a new age concept, Fintech has been around for several decades. In the 1950’s we were introduced to credit cards, in the 1980s mainframe computers made sophisticated data and record keeping easier. The 1990s saw the internet and e-commerce businesses emerge. (Forbes) All impacting the who, what, when, where, and how we operate financially.

To give you basic rundown of a few services/products that Fintech can incorporate:

  • Online personal finance management
  • Peer-to-peer lending sites
  • Budgeting tools
  • Blockchain technology
  • Cybersecurity
  • Smart ATMs
  • Mobile banking
  • Cryptocurrency
  • Apple Pay
  • payWave
  • Smartphone credit card readers – e.g. Square

The financial technology industry is thriving globally and received $17.4 billion in investment last year alone (CNBC). Fintech has grown rapidly in recent years – particularly with the new age gold rush that is cryptocurrency.

Here is a look at how it is currently changing the Banking Industry:

Australia is a global leader for consumers adopting Fintech - ahead of other advanced markets such as Hong Kong, Singapore and the USA.

The introduction of Smartphones has not only impacted our social life, but, the way we act financially. Customers are now able to access their bank accounts, purchase products from their favourite companies and pay electronic bills – all with the ease of using their mobile phone.

Mobile banking applications, virtual wallets, Apple pay, PayPal, etc. have allowed for easier methods for both the consumer and company to observe, receive and make payments to one another.

Blockchain, a technology that enables peer-to-peer transactions is another example and already in the review process for many big banks on how they can incorporate it into their organisation. The shift to this technology could mean lower costs and faster transactions for the end user.

Artificial Intelligence may be the next trend to impact finance and will play a key role in the continuation of Fintech. Preventing fraud, anti-money laundering, lending abilities and being able to interpret consumer data faster.

What are the positives and negatives of Fintech?


  • Lower costs Fintech has allowed for more competition, in turn lowering the costs for consumers. Transferwise is one startup designed to reduce the cost for customers looking to send money overseas. What once was solely controlled by large banks, using technology has allowed a startup access to the market.

  • Improved Services Mobile banking applications, artificial intelligence, virtual wallets - all of these products/services have the same effect - improving the way we operate in the financial sphere.

  • Reduced Time The world is chaotic, our working lives have been extended, traffic is growing and the amount of time we spend at home shortens every decade. Online shopping, mobile banking, etc. have allowed for a reduction into what originally involved a significant time investment.

  • Innovative Technology New technology allowed startup companies to enter a market that was once monopolised by large entities, as listed above with the Transferwise example. Improving creativity that was stagnant among a monopolised industry.


  • Socially We are being disconnected to our humanity at a faster rate than ever before. Along with social networks and self-service checkouts - mobile banking applications and smart ATMs reduce the amount of real life interactions required each day.

  • Discrimination New technology can ostracize certain demographic groups that are not as quick to adopt new products/services as the rest of the population. The most obvious demographic is people who are older and less inclined to want to deal with technology.

  • Customer loyalty Bank and teller closing due to increased efficiency from technology can cause a customers loyalty to shift. The rise of cryptocurrency went hand in hand with distrust for traditional banking, which can affect the overall stability of the market.

  • Artificial Intelligence There is a long list of issues associated with the increased use of artificial intelligence, ranging from cyber security, job displacement to morality.

New technology is constantly changing the landscape for both businesses and consumers. New ventures such as Afterpay have affected the way businesses and customers purchase products. Consumers now have the ability to pay for their purchase after receiving it, through a series of instalments on platforms like Afterpay. Albeit everything comes with a price and if you don’t make those payments it will get expensive! It is innovation like this that is constantly impacting the banking world and the way we require them to access our funds.

For large corporations, adapting to Fintech may be necessary to grow and succeed. For smaller startups, Fintech allows them to penetrate into a market that was once only accessible with a large budget. Next week we’ll look at how this is changing the skills that financial institutions are looking for.

With increases in investment, Fintech will surely continue to grow and impact our lives in ways that may not even be fathomable at the present time. The market will constantly change, impacting the way we operate financially.