The Rising of Fintech - How the Tech Revolution in Financial Services Represents A Paradigm Shift

Abstract

Finance is a field that shapes human relations not only from a purely economic point of view, but also has a strong influence on social structure, community development, prosperity, political or international interaction, which is even more relevant in a hyper-globalized world. The transformations began with the rising of the internet some decades ago and accelerated due to recent changes, such as increased computing power, the usage of financial apps etc. The scope of this paper is to present a short literature overview about the disruption brought in the finance sector by the recent technology developments. In addition to understand that technology is synonymous with innovation this paper shows examples of innovation drivers (including products and services). Finally, this paper highlights the long-term impact on social and geopolitical grounds with shifting power equilibriums, like the loosing banking monopoly of finances in favour of tech giants GAFA (Google, Amazon, Facebook, Apple) or the recent announcements of global and official cryptocurrencies, e.g. LIBRA by Facebook or CBDC (Central Banks Digital Currencies) from China government. The main findings of this paper are that FinTech has the chance to revolutionize the financial sector because it is more than just payment, new players (BigTech) could enter into the traditional banking sector and rise a new form of competition and FinTech has social impact on financial inclusion and financial literacy. Keywords: Technology, Management, FinTech, Tech Innovation, Financial Technology