Chapter 1: Introduction - Fintech vs Bigtech PDF

### **[[Chapter 1: Introduction - Fintech vs Bigtech]]{.smallcaps}** Introduction ------------ - \"The future belongs to those who prepare for it today.\" - Malcolm X Definition of Fintech --------------------- - [Investopedia]: \"**Financial technology** (better known as Fintech) de...

### **[[Chapter 1: Introduction - Fintech vs Bigtech]]{.smallcaps}** Introduction ------------ - \"The future belongs to those who prepare for it today.\" - Malcolm X Definition of Fintech --------------------- - [Investopedia]: \"**Financial technology** (better known as Fintech) describes new technology that seeks to **improve** and **automate** the **delivery** and use of **financial services**.\" - "Fintech also includes the **development and use of cryptocurrencies**, such as **Bitcoin**. While that segment of fintech may see the most headlines, the big money still lies in the traditional **global banking industry** and its multitrillion-dollar market capitalization. Big Tech and GAFAM ------------------ - [Collins's dictionary] "Big Tech refers to the **biggest technology companies**, including Google, Amazon, Facebook, Apple, and Microsoft. (GAFAM) a. Tech Giants' strategy - **Big Tech** companies are **transforming the financial services** industry by: - **Investing in/Partnering** with fintech companies - **Leveraging** their vast user bases - **Offering payments solutions** (e.g. Tap to pay etc.) - **Providing digital** wallets - Competing with consumer banks, building "quasibanks" - **Ultimate goal**: Control of the entire value chain (B to C) for profits maximization. Technologies and solution in Fintech ------------------------------------ - Key technologies include **AI, blockchain, IoT, cloud computing, SaaS,** and process automation. - Key solution include: **Mobile** and digital banking; blockchain crypto **stock trading** and so one Embedded Finance ---------------- - **Non-financial companies offering financial products/services** - Such as Bank-as-a-Service (BaaS) and APIs, aim for integrated and seamless customer experiences. - **Ultimate goal**: Integrated experience for customers, a frictionless, fast and convenient shopping experience including banking services where needed. Market Insights --------------- - The global **embedded finance market** was valued at USD ***65.5B in 2022***, with a CAGR of **32.2%** expected until 2030. Growth Factors -------------- - **Factors** include **increased cost of living**, **post-COVID digitalization**, smartphone adoption, cloud computing, and generational shift (new consumer behaviors) 8. Interaction's framework - Main components: 1. Fundamental drivers 2. Market outcomes 3. Policy objectives 4. Policy making - **Efficient interactions are crucial to build a sustainable ecosystem.** Future of Fintech ----------------- - Key trends include payments, cryptocurrencies, decentralized finance, NFTs, and the metaverse.