Banking on Innovation: The Rise and Future of Fintech

Exploring how financial technology is reshaping industries and building the future of finance

What is Fintech?

Fintech, short for “financial technology”, refers to the integration of technology into financial services to enhance their efficiency, accessibility, and usability. It encompasses innovations, such as mobile banking, payment apps, blockchain technology, and robo-advisors. The roots of fintech trace back to the 1950s with the introduction of credit cards, which eliminated the need for carrying cash. The evolution continued with the rise of ATMs, electronic stock exchanges, and online banking in the late 20th century.

The 2008 global financial crisis catalyzed a shift in consumer interest in traditional banks diminished — paving the way for the rise of digital-first financial solutions like PayPal and Square. Fintech then came into prominence in around 2010, primarily in the payment space. In its early stages, fintech was focused on venture capital funding and small business credit card payments. Now, fintechs today are focused on sustainable and profitable growth. Big banks now strive to develop their own fintech-informed digital products and services.

Fintech disrupts traditional financial services by offering digital solutions that allow users to perform tasks like investing, borrowing, and transferring funds more conveniently than ever before! For example, 1 in 2 consumers in the US in 2021 used a fintech product — primarily for non-bank money transfers and payment products.

“How is Fintech different from finance and technology respectively — how does it work within its intersection?”

While finance itself focuses on managing money and investments, and technology involves creating innovative tools — fintech operates at their intersection. It uses technology to solve financial challenges, such as enabling peer-to-peer payments via apps or creating algorithms for investment recommendations. Fintech companies combine these two fields to streamline operations, improve accessibility, and provide personalized financial services.

Case Study: Ramp, Interac, EQ Bank example

To truly grasp the transformative impact of fintech, it’s essential to look at real-world applications. These case studies illustrate how fintech companies like Ramp, Interac, and EQ Bank are not only pushing boundaries but also reimagining how we interact with finance on a daily basis. Each example highlights a unique approach to solving traditional financial challenges with innovative technology.

Ramp

Ramp, an unlimited corporate card and expense management platform, simplifies financial processes for businesses by offering automated tools for spending analysis and cost-saving recommendations. It takes a user-centric approach, which sets Ramp apart as a key disruptor in the fintech industry. For individuals familiar with juggling personal budgets or tracking personal expenses, Ramp’s efficiency mirrors the convenience of apps like budgeting trackers but scaled to meet corporate needs, showcasing how technology can streamline financial processes at every level.

Interac

Interac, a Canadian payment network, transformed how Canadians make transactions by introducing fast and secure digital payment systems. Its services include what we all know was e-transferring! This life changing feature has now become a household staple for seamless money transfers. From sharing a meal with your friends to paying rent, fintech innovation has transformed how we manage and interact with personal banking.

EQ Bank

EQ Bank (short for Equitable Bank), is known as a disruptor for its no-fee savings accounts and high interest rates. By eliminating traditional banking fees and emphasizing digital banking, EQ Bank redefines how people approach saving and managing their money. This resonates with anyone who’s sought better returns on savings or lower fees in personal banking, proving that fintech can directly empower smarter financial decisions in everyday life.

What does this mean?

How is Fintech evolving in today’s industry?

The rise of fintech is significant. Its growth signifies a transformative period in the global financial system, where technology not only complements — but redefines financial services for all of us. The integration of artificial intelligence, machine learning, and blockchain is democratizing access to such financial tools — thus allowing underserved populations to gain access to banking, credit, and investment options.

For financial institutions, adapting to fintech is not just an option — it’s imperative. Traditional banks must innovate rapidly or risk becoming completely obsolete. This evolution creates opportunities for collaboration, such as partnerships between Fintech startups and traditional financial institutions in an effort to marry innovation with infrastructure. By embracing cutting-edge trends, Open Banking is fostering collaboration between financial institutions and startups by allowing secure sharing of customer data, leading to personalized product offerings and enhanced customer experiences

Does this affect me as a student?

These innovations may eventually lead to a global financial landscape where transactions are faster, cheaper, and more secure. The evolution of fintech is reshaping how students manage their finances, offering unparalleled convenience and accessibility. Budgeting apps and micro-investing tools such as Koho or Wealthsimple provide user-friendly ways for students to save and invest with minimal funds. These tools empower students to gain financial literacy early on and prepare them for larger financial decisions post-graduation.

However, increasing automation and reliance on technology also raises questions about regulatory oversight and the ethical use of AI in the decision-making process.

Cybersecurity in Fintech

Despite its growth, fintech faces ongoing skepticism due to concerns about its cybersecurity. As an increasing proportion of financial data becomes digitized, risks of data breaches and fraud also increase — leading to mistrust among some consumers. As such, companies are faced with tackling complex challenges in implementing multi-layered defenses such as encryption, biometric authentication, and real-time fraud monitoring. Fintech firms are also collaborating with specialists and government regulators in cybersecurity to establish industry standards and combat emerging threats.

These efforts are critical in ensuring consumer confidence. Companies must prioritize robust security measures and transparent practices to build and maintain trust. By addressing cybersecurity risks, companies can and will bridge the gap between innovation and consumer trust — driving broader Fintech adoption rates across industries.

How do I protect myself?

Students, as frequent users of digital banking, are especially vulnerable to cyber threats like phishing scams and unauthorized access to bank accounts. While fintech companies invest heavily in advanced encryption and fraud detection, students must also take steps to safeguard their finances. Simple actions like avoiding public Wi-Fi for banking transactions, regularly updating passwords, and enabling two-factor authentication can add layers of protection. Additionally, monitoring bank statements for suspicious activity and using secure payment apps rather than sharing sensitive information are critical habits to adopt.

While fintech offers speed and innovation, students should remember that no system is foolproof. Staying vigilant and prioritizing financial security can prevent potential losses and stress. By combining fintech’s advancements with personal responsibility, students can navigate the digital financial landscape confidently and securely.

Read more about cybersecurity tips here: https://it.ucalgary.ca/it-security/top-10-cybersecurity-tips

Ivey Fintech Club

Are you interested in learning more about fintech and the insights to thrive in this rapidly evolving sector? As a hub for innovation and leadership, Ivey Fintech Club is Canada’s largest student-led fintech organization. To learn more about this club’s vision, initiatives, and the opportunities it offers, we sat down with Jamie Gao, the Director of Events for Ivey Fintech Club.

What is the mission of your club?

“Ivey FinTech Club’s mission is to help members grow into leaders in the FinTech space, keep students informed about industry trends and events, and create pathways for them to advance in FinTech.”

What fintech resources or events are available to the student body?

“Our club is thrilled to offer a wide range of events designed to ignite your passion for fintech and kickstart your career in the industry. We host case competitions that address real-world challenges, provide student-led pro-bono consultancy services for companies launching FinTech products, and offer members exclusive opportunities for research positions and access to educational speaker series throughout the year. Recently, we organized exclusive firm trips to Toronto, where students gained insider insights from industry leaders at EQ Bank and American Express.”

On the horizon for WITS+

Are you tired of feeling like your career conversations hit a dead end? Keep an eye out for “No More Ghosting” happening in January, an exciting networking event designed to connect you with like-minded individuals and inspiring mentors. Whether you’re kickstarting your career or seeking advice to level up, this is your chance to forge meaningful connections and gain invaluable insights. Don’t miss out on this unique opportunity to grow your professional network in a supportive and engaging environment!

Stay tuned for our next exciting blog post, dropping in two weeks, where we’ll uncover another hot topic in the tech space! Don’t forget to check out our latest episode of TidBits with WITS+, our biweekly podcast where we dive into stories, strategies, and successes for women+ in tech.

Written by Allison Li & Sarah Lieng