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The Surprisingly Long History of Fintech
By Megan Arevalo, Community Manager, Carsurance
We are knees deep in the information age. This should come as no surprise to anyone, especially to those reading these very words. The internet, smart devices, and computers - all of these immense technological innovations have allowed us to gain near-instant access to the bulk of human knowledge, and it’s what made it possible for you to come to this article with just a few clicks. It’s not only information that’s become immediately available, though. For example, interacting with other people is now a breeze through the World Wide Web and telecommunication. The financial sector also underwent dramatic changes, in an effort to implement new inventions and improve its scope and power. However the rise of the so-called fintech, (a portmanteau of financial and technology, capitalized by some as FinTech or Fintech), has its roots reaching farther back than most are aware of.This will be a historical summary of how fintech grew into what we know today. The Origins of Fintech The term “fintech” was first used in the 1990s, as the moniker for the Financial Services Technology Consortium. This project was an effort by Citicorp (which would eventually become Citigroup) to further technological cooperation, marking its new stance on in-industry collaboration. Though the term is relatively recent, the evolution of what it denotes started much, much earlier. The first endeavor that could legitimately be construed as fintech was the so-called Victorian Internet in 1867. This was the first transatlantic telegraph cable, connecting London and New York financial markets. A massive undertaking in its own right, it signaled the beginning of a permanent shift from the ways of old communication. From then to World War 2, fintech was mostly on the rise (barring a hiatus caused by World War 1 and the Great Depression), with financial globalization (Fedwire’s telecommunication system for funds transfer processing) and the first credit card in 1950 issued by Diner’s Club, being some of its highlights. The period between these years and the 1970s is commonly referred to as the first era of fintech. The Second Era of Fintech The second era for fintech began in 1967 and is rife with massive technological innovations.
A massive undertaking in its own right, it signaled the beginning of a permanent shift from the ways of old communication