The Fintech History Book Vol. 4
Like early man, fintech wasn’t always at the top of the financial food chain. It took years of evolution before fintech gave up feeding on carrion and begun hunting for itself.
It is here, in The Fintech History Book Vol. 4 that fintech steps out of the shadows, dries off the last drops of primordial soup and carves its name in the annals of history.
The Fintech History Book series has chronicled fintech’s rise from amoeba floating aimlessly around in prebiotic broth to climbing to the top of the financial food chain. From single cell lifeform, to land based quadruped, bipedal scavenger and at last, apex predator.
Fintech has risen to the top.
The past is the past, but the events in Vol. 4 flirt with the lines of the present. They titillate and tease the future. Challenger banks have risen, contactless is now in major use, but they have not happened. They are not past but ongoing.
Nevertheless, The Fintech History Book Vol. 4, ladies and gentlemen. The golden age of fintech.
The year is 2010, and the high street sees something it hasn’t in over 150 years. With much of the financial industry still reeling from the 2008 apocalypse, the way is paved for major disruption. Metro Bank is given a high street license. The challenger bank challenge is underway.
In 2011 Google launch Google Wallet, the precursor to Google Pay. The technology was the foundation of NFC payments and one of the first steps on the way to popularising the technology. However, it wasn’t until 2013 that tech savvy users – or nerds, if you will – were able to pay for things by ramming the back of their phone up against a card terminal.
Google Wallet signalled to the beginnings of tech titans’ involvement in finance. Google, Amazon, Facebook, Apple (GAFA) will all look to become further involved in fintech as we move into the future. But even by 2011, Amazon had launched Amazon Pay 4 years prior, and now Google had its own offering. It’s only the beginning of the golden age, and GAFA already has fintech in its crosshairs.
Apple release Apple Pay in 2014, matching tech behemoth rivals in fintech innovation. This isn’t the last you’ll hear from Apple in Vol. 4. They’re busy little behemoths.
Roll on 2017, and biometrics are beginning to make inroads into banking. HSBC is making use of voice recognition software and TSB has adopted iris recognition. Banking in 2017 must have been like living in Minority Report. Banks begin linking mobile apps to their handset’s finger recognition software, as major mobile brands roll out the biometric unlock.
By 2017 in China you can pay with your face. But it doesn’t involve slamming your head against a payment terminal in the same way you’d do with your sexy challenger bank card.
2018 was a big year for fintech. In January, the Open Banking directive comes into force. The major banking giants have to begin making their data available to other Third Party Providers. With the user’s permission, of course, we’re not talking about Cambridge Analytica here.
Open banking’s AISPs create a customisable shopping experience, and account aggregation allows users to see all their financial products in one place. Like a Swiss army knife. But for financial products. Sort of.
We also see the rise of remote banking in 2018. A UK Payment Markets report finds that almost half of UK adults are using mobile banking in 2018. Bank branches are closing and human interaction is well out of fashion, but you’ve got a snazzy banking app on your phone to hold you close at night instead.
2019 comes around, and big tech and finance become ever more entangled. In June, Facebook release Libra, a stable coin, in a move that could see them becoming the biggest central bank in the world. Or it might not, as many regulators and industry commentators are saying. The red tape is looking like it could pose something of a barrier. But I believe it was William Shakespeare who said, “For he who controls the data, anything is possible.” And, Facebook certainly has a lot of data.
Summer 2019 is a busy time in the annals of fintech. It sees a period of expansion by the trailblazing challenger banks. N26 and Monzo hit The States. Like the Beatles in the 1960s. But instead of bringing over a groovy new rhythm and blues sound, they offer a groovy new way to bank. Revolut take a beta product over to Australia. Much like when British expats (at her majesty’s pleasure) took cricket over in the 1800s. I hear it’s quite popular there these days.
Do you remember a couple of minutes ago when you read about Apple releasing Apple Pay, and I said It wouldn’t be the last you’d here of them in this article. Well buckle up for Apple Round 2, because in August 2019 they release a credit card. It’s metal, as are most things Apple. So that’s good.
And with that, we find ourselves up to date. It’s August 2019 and GAFA have a foothold in fintech. Biometrics are king in remote banking. Open banking is laying the foundations for a generational shift in the way financial products compete and payments are done. Challenger banks have become mainstream and managed to maintain the element of cool. They’ve done to the banking sphere much the same thing as Brewdog did to the craft beer sphere. But whether Brewdog have maintained their cool is arguable. Maybe not.
And from this point, there is nowhere to look but forward. Keep your eyes peeled for The Fintech History Book Vol. 5, looking back to the future.