FinTech was no longer a prediction about the future. The vocabulary surrounding it had already entered everyday financial and technology discussions: APIs, data aggregation, encryption, digital identity, crowdfunding, cryptocurrency, blockchain and alternative finance were becoming part of the mainstream.
The more important point was structural. Technology was beginning to change how financial services were designed, distributed and consumed.
What is FinTech really?
FinTech is a broad category rather than a single industry. At the time, I saw it developing across several areas, from enterprise software to emerging financial technologies.
Legacy enterprise software
FinTech companies were increasingly providing streamlined business software for processes traditionally handled inside financial institutions. This was a less visible form of disruption, but potentially an important one because it attacked the infrastructure on which financial institutions depended.
Emerging technologies
This was where much of the excitement was concentrated.
Alternative finance. Lending was beginning to move beyond traditional banking channels. Banks could no longer assume that their established lending models were insulated from technological competition.
Payments. Payments were one of the most visibly disrupted parts of financial services. FinTech companies were challenging processes that had remained largely unchanged for years.
Personal wealth management. Digital firms were beginning to address wealth-management needs through technology and more streamlined customer experiences.
Blockchain technology. The ledger technology underlying Bitcoin was attracting attention well beyond cryptocurrencies. Bitcoin itself might evolve or fail in its original form; the broader idea of a distributed ledger had applications that extended into other areas.
Regulation becomes part of the innovation story
The excitement around FinTech was already being tempered by regulation, including the development of PSD2 in Europe. Regulation was not simply an external constraint. It was becoming one of the forces shaping the speed and direction of innovation.
The challenge was to understand the opportunities and the financial burden early enough for startups, banks and regulators to adapt. The central question was therefore not whether regulation mattered, but how regulation would affect the nature of FinTech innovation.