Before the mid-1960s, if you had banking business to do, that meant physically going to a branch of your bank, typically before 5pm. By the mid-1970s, if you needed cash fast anytime, all you had to do was visit an automated teller machine linked with your bank. The 1990s brought us the revolution of conducting most financial business at home on our computers, and now, as we all know, you can do virtually any financial business – whether you’re investing, transferring money, or paying bills – just by looking at your smartphone. Encompassing all of these advancements, today’s word is all about making financial business easier and more accessible.
A portmanteau of the phrase “financial technology”, fintech combines the word financial, which comes from the Old French finance, meaning ‘to end, payment, or settlement of a debt’, and the word technology, which comes from the Greek tekhnologia, meaning ‘systematic treatment of an art, craft, or technique’. Essentially, the term encompasses all technology which is used to improve the accessibility, speed, reliability, and overall useability of financial services.
Though innovations in banking and finance are as old as the industry itself, with the Knights Templar inventing a system of credit for Christian pilgrims anxious to join the Crusades and, earlier, the Chinese Tang Dynasty’s use of feiquan, or “flying money”, which could be deposited and reclaimed at different offices, the earliest usage of our term can only be traced back to 1985. Referring to a “bot” that had altered a mailbox, Jane Bord writes in the August 11 edition of The Sunday Times stating: “The flaw was revealed by Peter Knight, the editor of a business newsletter, Fintech, who was ‘shocked and annoyed’ when he switched on his system to find an ‘alien’ had been in his mailbox.”
Interestingly, from that usage, the phrase didn’t really catch on – in other words, it was still considered to be some sort of business/marketing jargon. Even with the rate of increasing technological innovation, it would take almost another 2 decades for the term to achieve mainstream usage and understanding. This would come from a growth capital firm called Updata Capital, who, in a January 1, 2003 newsletter entitled Financial Technology Monitor, wrote: “Updata’s Financial Technology Index turned in its worst performance since inception with a 24% decline in 2002…. While a price decline in 2002 for the Fin Tech index is not viewed as a positive for the sector, on a relative basis, the Financial Technology companies that we track compared favorably to the NASDAQ’s 32% decline and were on par with the broad market where the S&P 500 declined a comparable 23%.”
Following this application, the term gradually started to be applied in a more generalized fashion towards anything financial, as can be seen in an October 31, 2014 article by Edward Robinson in The Washington Post, noting that: “Scores of fintech enterprises in London and Silicon Valley are devising new ways to lend cash, transfer money abroad, settle international commercial transactions and score credit risk — all of which have been the domain of banks for centuries.”