Fintech and Digital Banking

Today, most customers have smartphones and other gadgets, giving them easy access to online services. Digital banking is the process of digitalization of banking activities and services that were previously available only in the branches.

The history of these banks dates to 1993 when Temenos AG banking software system provider was founded. In 1994, Microsoft Money made bank accounts accessible for regular households.

During 1997 and 1998, digital-only banks were launched in Canada and the United States of America (USA).

Between 2001 and 2009, the number of online banking users reached 54 million only in the USA. This shift was greatly aided by the launch of the first iPhone in 2007.

Over the years, the transition towards online banking was driven by millennials and Temenos acquiring various competitors and mobile application leaders.

Fintech refers to technology-enabled innovation in financial services. This technological sea change is transforming the financial sector and the wider economy, affecting all aspects of our work - from payments to monetary policy to financial regulation. Central banks have a responsibility to be at the vanguard of the intensifying debates about the nature of money in a digital world and how new players will reshape the financial services landscape and the financial system more broadly.

Rapid advances in digital technology are transforming the economic and financial landscapes.

Financial technology -- fintech -- is creating new opportunities and challenges for the financial sector – from consumers, to financial institutions and new entrants, to regulators.

Fintech offers many opportunities for governments, from making their financial systems more efficient and competitive to broadening access to financial services for the under-served populations. However, it can also pose potential risks to consumers and investors and, more broadly, to financial stability and integrity.