The future of FinTech
by: Sander Boon
FinTech is hot and evolving fast. Where does this development come from? Why is it so successful? Where is it going? To understand FinTech, we have to closely look at two interrelated socio-economic waves.
The first is the long wave in the political, cultural and religious organization of society, which is gravitating from a more collectivist to more a more individualistic organization. In a way this shift reflects the dual nature of man: individualistic, but also group oriented. The change is often caused by technological breakthroughs, like the invention of the printing press somewhere between 1440 and 1450 AD and the gradually receding power exerted by the Catholic church. Today, we also see a changing political environment: from the collectivist Welfare State to one that is based more on individualism. This is helped by the invention of the internet.
The second wave is rooted in the foundations of the political economy. Since the fall of Communism, the Western political economy has been the prevalent paradigm that has been dominating the world. As a political-economic system it is highly confusing because it claims to be capitalist and based on the virtues of free markets, yet it is characterized by large-scale state interventions and privileged playing fields. FinTech is to be seen as competitive force and a direct reaction to the malfunction of many parts of the financial system, bringing back a level playing field. FinTech financially empowers the individual, away from largely unfunded collective pension schemes and financial repression imposed to save the Too Big to Fail financial institutions.
These two interrelated waves can explain why FinTech is so successful in our time. It also points to the fact that we are only just at the beginning of this exciting and promising transformation of society.
Editors Notes: This entry has been submitted to the FINTECH Book, the world’s 1st globally crowd-sourced book on FINTECH. Readers that enjoyed this initial abstract are invited to share and like it so that it may be featured in a longer version.