The financial sector has always been one of the quickest to adopt new technologies. From using phones to provide banking services to the new FinTech sector, the relationship between the two sectors has always been positive.
One of the prominent examples from the last few decades on how the financial sector was fast in embracing new technologies could be seen in the issuance of credit and debit cards. This was shortly followed by the instalment of the Automated Teller Machines (ATMs) where users can withdraw and deposit money from and into their accounts.
Later on, and in the early 1980s, banks in the United Kingdom began offering banking services through dedicated phone lines to their customers. Such service, though labour intensive on part of the bank, this service provided customers with the convenience of conducting their banking transactions without the need to be physically present at a bank’s branch.
The provision of banking services did not stop here. Banking innovation continued to explore new avenues. In particular, banks were not hesitant in experimenting with new technologies like gaming consoles. In the early days of the internet, the Sega Mega Drive gaming console added a new accessory called Sega Mega Anser in 1990 allowing Japanese users to access the internet to primarily play online with other users. This accessory also allowed users to conduct basic online banking functions like checking customers’ accounts and making transfers.
This could perhaps be regarded as one of the earliest forms of internet banking. Internet banking which began in 1996 in the United States can be regarded as the backbone that led to the development of today’s fintech sector. Internet banking allowed customers to conduct banking transactions without the need to talk to a banking representative on the phone. This meant banks can rid of the laborious phone banking and replace it with an automated service. Internet banking gained a stronger foothold as we edged towards the new millennium. Mobile phones connected to the internet using the WAP protocol became was introduced allowing mobile phone users to access the internet. Using the WAP protocol, banks across Europe allowed customers to make banking transactions using mobile phones. This is regarded as one of the earliest forms of mobile banking.
Mobile banking became the name of the game throughout the 2000s and the early days of the 2010s until the innovation of mobile application gained a foothold allowing financial institutions easier access to customers and opening the doors wide open for the FinTech revolution to take place.
Today, there is generally no need for us as customers to go into a bank and make a particular transaction. Everything can be made with a few taps on a smart device. We can now make purchases using our phones and even exchange foreign currencies using our smart devices and in some instances within the same mobile application. Even central banks began issuing central bank-backed digital currencies. However, as this marriage between finance and technology becomes more intertwined, one wonders how would those with no access to technology be supported?