The Role of Fintech in Financial Globalisation

Economics is a deeply complicated discipline to understand, and one which – understandably – often escapes the average citizen. But economics is also a story of progress, and one which every one of us has experienced in some form or another. The growth of financial technology (fintech) has been a lynchpin for democratised access to funding and savings opportunities, and plays a major role in something called financial globalisation.

The Evolution of Fintech

Fintech as an industry is not a young one. It has existed in some small form since the evolution of digital technology in the mid-20th century, as banks sought better computational capabilities for the handling of transactions. However, fintech as an industry came into its own at the turn of the millennium, as new technological advancements enabled a revolution in product and service possibilities.

Today, the fintech industry is typified by a number of disruptive products and ideas. The average consumer has encountered fintech through engagement with digital banking; fintech companies were first across the line to digital banking capabilities, beating major banking institutions to concepts and provisions now commonplace. Alternative, digital-only banks and lenders have given consumers more control than ever before.

Meanwhile, B2B fintech solutions have enabled industries to flourish in a new digital landscape, with payment solutions changing the game for e-commerce and heralding a new generation of seamless supply. Fintech law firms specialising in the legal marriage of business and financial technology have seen growing demand, as new businesses seek to capitalise.

Altogether – and alongside new paradigm shifts in financial products and product management – these new fintech movements would come to symbolise a new age of financial globalisation.

What is Financial Globalisation?

Financial globalisation, put simply, refers to the flow of monies between nations and around the world. Countries invest in one another via funding and resource trading, while private enterprises operate internationally – creating a complex web of money flow with significant, complex impacts on domestic markets.

The global geo-political map is in a state of constant flux, as is the technology behind financial globalisation. Indeed, fintech is inextricably linked to financial globalisation, with its continued development and accessibility having unavoidable and profound impacts in a number of crucial ways.

The Key Impact of Fintech on Financial Globalisation

One of the most obvious ways in which fintech solutions have aided financial globalisation is in the relative democratisation of access to banking. As the internet reaches near-global ubiquity, and communication technology becomes commonplace in even the most disadvantaged nations, vastly more people are able to access financial products and solutions that they would otherwise have been effectively barred from accessing.

This enables the international flow of funding and debt alike, with benefits to growing communities and emerging business. This democratised flow of funding is widely regarded to be a net positive, as money begins to meaningfully penetrate deprived areas.