The Evolution of Fintech
Before we go on to understand the evolution of the fintech industry, it is first critical to understand what exactly is Fintech. It’s a buzzword, but what exactly is it?
Simply put, fintech is just technology that is used to improve the delivery of financial services. The term only gained traction in the 21st century, but in reality, it has driven how people interact with their money for well over a century.
Now we think of fintech in terms of cryptocurrencies and start-up banks, but its roots can be traced back to the late 19th century when money could be moved around by telegrams and morse code — though this probably wouldn’t get many investors excited today.
(Source: https://www.emergingpayments.org/article/fintech-the-history-and-future-of-financial-technology/)
Fintech has indeed come a long way and as financial services continue to evolve, so has the needs and demands of the average fintech user. Fintech can be broken down into 4 stages — Fintech 1.0, 2.0 and 3.0. To put it simply, 1.0 marked the construction of infrastructure which would help to support globalization of trade and commerce, 2.0 symbolized the transition of analogue based financial services to digital based financial services. 3.0 concretized digital banking and made it more accessible for the common man. Question is: what’s next?
Fintech 4.0
The METASEER team foresees the evolution of 3.0 to 4.0 as a consumer driven evolution. Under Fintech 4.0, consumers expects more autonomy, transparency and decentralization of personal banking matters. This falls in nicely with the elements of Web 3.0, where every single individual is now expected to be in charge of their own finances and be able to look after their own wealth and finances. This is now a trend which has shown itself not only in the world of finance, but also in social media, people are increasingly masters of their own fate, with an increasing tendency to produce their own content and pioneer new trends. METASEER seeks to align itself with Fintech 4.0 by endorsing the use of Web 3.0 technology and allowing consumers to manage their own trading resources, most notably of which, their own money. Web 3.0 will also bring more privacy for clients — a feature which comes naturally when the platform is no longer a custodian of funds. Not being the custodian means that the platform has no right to question where the funds are from, at least for now, until future regulations or RegTech demands such action from the platform.
What exactly is Web 3?
Web 3.0 is built largely on three new layers of technological innovation: edge computing, decentralized data networks and artificial intelligence.
While in Web 2.0 recently commoditized personal computer hardware was repurposed in data centers, the shift to Web 3.0 is spreading the data center out to the edge, and often right into our hands.
(Source: https://medium.com/fabric-ventures/what-is-web-3-0-why-it-matters-934eb07f3d2b)
Concluding Thoughts
As can be seen in the above definition, Web 3 and Fintech 4.0, we believe would fuse together to see the rise of a new era of platforms which decentralizes finance and allow individuals to be masters of their own pockets. However, The METASEER team believes that this does not necessarily coincide with the rise of a lawless “Wild Wild West” as authorities find it harder to track illegal activities. A balance between self-autonomy of resources and regulatory alignment must and will be found. This balance will most likely be achieved through the use of concepts such as Zero-Knowledge Proof, a concept which balances verification of activity with protection of privacy. While still in it’s infancy, the concept shows great promise and when combined with interfacing technologies such as VR/AR, can create the bridge that is discussed above.
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