Hey! Marc!
Do you know what fintech is?
Lucy?
How about you?
Okay then.
What about tap-n-go? Do you know what that is?
All right! Now we’re getting somewhere.
Because if you know what tap-n-go is, you’re halfway to knowing what fintech is.
Hey, get back here.
I said halfway.
Ready to learn?
Great!
The first thing we need to be clear about is that the word fintech is an abbreviation.
It’s short for financial technology.
That’s a term that means a whole bunch of things, including better ways of moving money around.
And that’s what we’ll look at today.
Everything from using digital currencies, paying for things with your phone, and much, much more.
Global investment in the fintech sector has reached almost $100 billion since 2010.
If you look at 20 of the world’s major economies
you will see that about 30 per cent of their citizens use at least 2 different kinds of fintech services.
In China and India over 50 per cent of consumers use tools like money transfers and borrowing and financial planning services, which are part of fintech.
Many businesses whose models were based on the use of cash
are adapting to the change.
More and more, the traditional banking payment services that baby boomers grew up with are changing.
Today it’s not unusual to see iPads equipped with card readers, retail outlets and services that only exist online or people paying bills using e-transfer.
The rise of peer-to-peer payment platforms has meant that people can make payments without going through a bank or using cash.
It’s made paying for things more convenient, especially online.
However, Fintech payments also have their issues.
As more payment systems go digital, cyber attacks become a bigger risk.
Digital currencies like Bitcoin are not accepted in most places and their value can go up and down like a yo-yo.
Fintech is changing the way the world operates financially, and the opportunities are exciting!
Nevertheless, its challenges are real, and they’re only going to get bigger as more of the world embraces it.
At the Bank of Canada, we are taking all the trends around fintech payment very seriously.
And we will continue researching its effects.
Money keeps changing. But here's what isn't changing.
Supplying the Canadian dollars people need to carry out their business is and will continue to be one of the Bank’s important mandates.
And why not? Not only are our bank notes beautiful, they are secure, widely accepted and stable in value.
After all, they are backed by the Bank of Canada.