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Fintech has several advantages over traditional banking institutions that allows operators to be more innovative and to deliver services to their customers more quickly and cost-effectively. This has enabled fintech to shake up and disrupt the financial services industry.

But it’s actually unlikely that fintech will replace traditional banks. For one thing, banks and established financial institutions enjoy a much greater degree of trust and loyalty from their customers, which has often been built up over many years.

In addition, the trend in the financial market is now towards partnerships between traditional banks and fintech companies. The banks gain technology and new methods of service delivery, while the fintech operators gain access to an established customer base and extend their reach.


A blockchain or distributed ledger is a decentralized database that exists in identical copies on devices all over the world, belonging to all the people who are part of that particular blockchain network. Each user has equal rights to view and access past transactions and to make changes to the database by initiating a transaction, which is then stored in the database and becomes visible to all the other users.

In this manner, a blockchain has the ability to permanently and transparently log transactions of information — whether they be cryptocurrency transfers, exchanges of contract documents, or whatever. Once complete, each transaction is permanently stored in the database (the word “immutable” is often used in this context), and can then be seen and accessed by any member of the network.

Crucially, each transaction on the blockchain occurs directly between two or more parties, without any external entity being involved. This means no banks, clearinghouses, or transaction fees are necessary.


Yes — one of the factors that first propelled financial technology or fintech into the public consciousness was the development and trading of cryptocurrencies, of which Bitcoin is probably the best known. Bitcoin was also the first widely recognized application of blockchain technology.

Bitcoin was created in 2008 and announced through a white paper that was published in a forum online under the alias Satoshi Nakamoto. The Bitcoin network contained rules to determine the validation of transactions on its blockchain ledger and the creation of currency in the system.

Bitcoin employs a “proof of work” system, which involves “miners” solving complicated puzzles. The mining process also creates new Bitcoins. The network is self-regulating and makes sure that someone solves the puzzle and mines a block roughly every ten minutes. You can buy Bitcoin from online exchanges like Coinbase, Kraken, or Poloniex, by setting up an account and paying with your debit or credit card


Banks are using financial technology to make access to cash and credit easier for their customers. Financial institutions are using digital tools like chatbots to enhance the customer experience, mobile apps to give consumers real-time access into their finances, and machine learning algorithms to secure against fraud.

Several banks have introduced AI-powered virtual assistants to give users text and voice-enabled platforms that can automate payments, deposits, transfers, and other transactions. They can also offer detailed information in response to queries and requests.

Behind the scenes, banks and other finance institutions are engaging the services of fintech providers for security and protection against fraud, and for assistance in remaining compliant with industry regulations.


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