Last week marked two important events in the Finance Industry - FinTech was added to the dictionary and it's been 10 years since the Lehman Brothers filed for bankruptcy leading to a global financial crisis.
Fast-forward 10 years, as regulation becomes more stringent, firms are embracing technology and innovation to strengthen margins in a competitive market. This has led to a new niche, namely the FinTech industry.
This week, Merriam-Webster added FinTech to the dictionary, defined as "products and companies that employ newly developed digital and online technologies in the banking and financial services industries".
The addition of FinTech to the dictionary is an important milestone in the Finance industry. It demonstrates the global importance placed on technology within the industry. Globally, there are 25 FinTech Unicorns at present. These companies are often startups seeking to disrupt traditional financial services institutions. FinTech companies offer products in lending, investment management, payments, and foreign exchange.
This trend in innovation and technological enhancement is not limited to start-ups. Large incumbent banks are increasingly leveraging their size and customer-base to remain competitive. This has been in many forms including large-scale digital transformation projects, as well as symbiotic partnerships with disruptive startups. Royal Bank of Scotland (RBS) recently confirmed that Starling Bank will be supporting them to develop a digital bank of its own.
Furthermore, to boost competition in the Small & Medium Enterprises (SME) market and corporate banking, RBS was directed by the European Commission to set up two funds worth a combined 775 million pounds.
In the 10 years since the global financial crisis, the Finance and FinTech industry have advanced significantly, evident from FinTech’s recognition in the dictionary.
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