Fintech Fever

It may be the root of all evil, but we love it anyway. Because without “it”, we would have nothing. “It” is money, and it makes the world go round. With money, we made a beautiful thing called technology. Then, one day, the two fell in love and had a child called “fintech”. This is a new kind of love story.

We are busy people. We don’t want the inconvenience of actually carrying things around (ugh, as if). Well, fintech can help us out so that we don’t walk around like peasants. With fintech, we can carry our wallets right in our phones (cue: Apple and Android Pay). Or, perhaps you are more familiar with money-transferring services such as Venmo. Well, whether you use Venmo while making bad decisions when out with friends or PayPal to send money to a loved one, you are part of the fintech world. Welcome.

Yes, it is very convenient, but it is secure? Surprisingly, yes. In fact, it is very secure. Remember when you went to the store the other day (I know your life), and tried to swipe your credit card… only to get stopped by a small piece of paper reading “please insert if you have a chip”. Well, they are simply helping you keep your money safe (so that you can spend it at their store). With a chip-activated card, a new number is generated every time you use that card. Well, since everyone hates numbers and doesn’t want to keep track of every new number that is generated, the chip is doing all the securing for you.

One of my favorite hobbies is convincing people that I am responsible. So, with fintech, that is now made Simple (shameless pun). There is a digital bank, called Simple, that helps you visualize your spending habits, organize where your money is distributed, and integrate all of your account balances together through their “goals” feature. Even though we, at Gatortech, wish we were cool enough to sponsor a company, we are not. We are just fangirls and fanboys of great technology, and nothing more.

The financial ecosystem is something that many people do not understand. Luckily, we have a financial expert in Gatortech, Matt Bicknell, to guide our techies into not spending all of our money on the latest gadget. Bicknell explained how technologies such as Bitcoin and Blockchain work, as well as financial concepts that I am still trying to wrap my head around.

The technical side was the first topic on the list, to ease the techies into this whole new world of finance. Blockchain is the technology behind Bitcoin. Bicknell explained that, every transaction gets added on to a “chain”, public ledger, or past transactions. This way, all parties involved verify its history before moving forward. There’s a lot of complicated encryption going on in the background, and no one likes complicated things, so I will leave you with that simple gist of it. This system verifies the process even further for those who like to be “responsible”, or whatever, and keep their transactions secure.

This is where things got messy. And by “messy”, I mean I did not, and still do not, fully understand what went on exactly. We learned about High Frequency Trading, which has to do with very small firms front running orders before they arrive at their final point within an exchange, where the left-over portion of said orders become a tax. This tax can go from one cent per second to over $160 million a day. As you may have guessed, this is a major threat to big banks.

Saving the best for last, we learned about Quantopian — a hedge fund that let’s freelance analysts develop algorithms used for buying and selling securities using Python. Blink your eyes. They can execute thousands of trades in a microsecond — faster than the time it took for you to blink your eyes just then. This is crazy compared to speeds from the pre-fintech error.

The beautiful love story between finance and technology has a bright future ahead, and we cannot wait to see what happens. Who knew techies and finance-bros would get along so well?