When people hear the word financial technology (“fintech”), almost always they relate it to their latest mobile app which helps pay for their morning Starbucks coffee without swiping a card or using any cash. In fact, fintech infrastructure has had a long history and its advancements have been ongoing for over 50 years.

• 1950s, credit cards were introduced to ease people from the burden of carrying cash
• 1960s, ATM’s were introduced to replace bank tellers
• 1970s, National Association of Securities Dealers (NASDAQ) was founded and began trading as the world’s first electronic stock market
• 1980s, saw the introduction of complex data and record-keeping systems for banks
• 1990s, launch of the internet leading to the thriving of e-commerce business models

Now in our modern days, retail financial services are being further digitized through various ways such as, payment apps, mobile wallets, equity crowdfunding and online lending platforms (Read “Evolution of Remittance Industry in Malaysia”).

Fintech companies have been able to identify and leverage on certain gaps in the banking industry which have been overlooked by traditional banks. Technological developments have been disrupting traditional banking methods and proven to be effective and beneficial to individuals, corporations, especially small businesses. The volume of global cashless wholesale payments commenced by businesses including government bodies in 2015 stood at 89.4 billion; and is estimated to reach over 120 billion in 2020. The number of corporations embracing digital payment methods seems to be growing as to the fact that fintech companies have been helping to reduce information asymmetry in the system.

By working on integration of various available technologies, Fintech companies have improved the accessibility and speed of their services; permitting real-time updates, shorter waiting periods, removing the need for paper and recurrent identity verifications for their customers. They are also inexpensive in comparison with banks as Fintech companies are asset light, thus have an operational advantage which keeps costs low translating to much cheaper-priced services for businesses. This allows fintech companies to exist to empower the underserved bodies in the market such as small-medium enterprises (SME). SMEs in Malaysia contributed 36.6% of the national GDP in 2016, and yet they are overlooked by banks. Above all, Fintech companies focus on being client-centric and understand that customer experience is the main competitive front. Fintech companies work towards providing better user experience; making their service convenient, simple to use and responsive towards client needs. Due to banks negligence, Fintech companies have been proactive in resolving these troubles, resulting in a steady increase and growth of their share in financial services industry.

With regards to being client-centric – EasyPay Transfers, a Malaysia fintech providing digital remittance for businesses, has now introduced its USD payment service to China. With this new currency service, EasyPay Transfer clients now have the option of choosing the currency type with which they can pay to their business counterparts in China (Read “Why Chinese Businesses still prefer USD”), and yet enjoy seamless payment service and attractive Forex rates.