What is Fintech?
Fintech is an emerging financial services sector. The word comes from conjoining ‘Finance’ and ‘Technology’ together. Basically, it means ‘Financial technology’.
However, where financial technology once described the computers and office gadgets used in the office, it now refers to automation. Primary areas of automation include internet banking, insurance, trading and risk management.
It is not difficult to imagine how automated services could get such a strong foothold in finance. Although in areas such as trading, which has been reliant on people calling other people on phones, it is not immediately obvious how it works in an area such as trading.
Yet there are a number of companies offering innovative trading solutions which save time and money. For example, there is now a social media network for the bond market. The network is called ‘Algomi’ and it was founded by Stu Taylor. This social media site allows bonds sellers to connect with buyers directly and cuts out the need for speculative phone calls. This obviously saves a lot of time and money which is probably why it has been adopted by some of the world’s largest banks.
Why has tech become so important in finance?
There are many different explanations for this floating around at present. But, the most popular by far, seems to attribute this fast-paced emergence to the financial crash of 2008. Essentially, when it was decreed that the financial sector must reform, there was a lot of emphasis placed upon risk management. As a result, risk management systems which can efficiently monitor risk in real time were introduced.
What does this mean for jobs in finance?
As you can imagine, if millions of pounds are being poured into risk management systems, online trading platforms or other automated finance solutions, then someone needs to be able to maintain them by writing and rewriting computer code.
While the usual finance roles will remain, some of these will likely evolve. Furthermore, there has been an increase in demand for software developers, analysts, programmers and engineers. As fintech grows and automation creeps into other areas, coding languages will most likely be expected in finance CVs.