(the following text is estimated to be concluded in Emerald insight’s publication project: Fintech startups: the future at the heart of Industrial Revolution 4.0)


The industry of Fintech, short for financial technology, has a rich history that dates back to the 19th century. The development of various technologies and systems laid the foundation for the evolution of Fintech as we know it today. Based on the historical data that has mentioned the evolution of Fintech, its history can be grouped into three distinct periods.


Fintech 1.0 (1866 – 1976) 

Back in 1860 a device called PENTELEGRAPH was developed to verify signatures by banks. However, it was in 1866 that historians widely recognize the first valid footprints of fintech. This was the year when the first transatlantic cable was successfully laid, providing the necessary infrastructure for financial globalization. This milestone opened up new avenues for international financial transactions and communication. Fast forward to 1918, the Reserve Banks developed the Fedwire Funds Service.

These dedicated funds transfer network featured a Morse code system that connected the 12 Reserve Banks, the Board, and the Treasury Department. This innovation improved the efficiency of fund transfers within the banking system. In 1920, the renowned economist John Maynard Keynes published his book “The Economic Consequences of Power,” which explored the links between technology and finance. Keynes’s work shed light on the potential impact of technological advancements on the financial sector, laying the groundwork for future developments.

A significant breakthrough in the payment industry came in 1950 when the Diners Club issued the first “general-purpose” credit card invented by Frank X. McNamara. While initially limited to restaurant payments, this marked the first honest effort to make payments cashless. Subsequently, in 1958, American Express introduced its own credit card, further advancing the concept of electronic payments. In 1966, telex networks were established in the United States, Canada, Great Britain, Germany, and France. These networks provided the essential communication infrastructure for the continued evolution of fintech.


Fintech 2.0 (1976 – 2008)

The period between 1967 and 2008 witnessed significant advancements in fintech, shaping the financial landscape further. In 1967, Barclays in Enfield became home to the world’s first cash machine (ΑΤΜ), marking a pivotal moment in the development of automated banking services. Subsequently, in 1975, a more sophisticated version called Barclaybank was launched. In 1971, NASDAQ (National Association of Securities Dealers Automated Quotations) revolutionized electronic trading of securities and initial public offerings (IPOs). This breakthrough allowed growth companies to raise capital from public markets, promoting economic expansion.

Recognizing the need for cross-border payment communication, 239 banks from 15 countries formed the Society for Worldwide Interbank Financial Telecommunication (SWIFT) in 1973. This cooperative utility aimed to address the challenges associated with communicating payments across borders. The collapse of Herstatt Bank in 1974 triggered the first major regulatory focus on fintech issues.

This event led to a series of international soft law agreements focused on developing robust payment systems and related regulations. Throughout the 1980s, notable innovations took place. Michael Bloomberg founded Innovative Market Solutions (IMS) to provide real-time market data and financial analytics to Wall Street firms. The company later became Bloomberg L.P. In parallel, William Porter created Trade Plus which kickstarted the online brokerage investment revolution and drove down the cost of online trading.

The company reorganized as ETrade Group in 1994. Additionally, the “Black Monday” crash in 1987 resulted in a worldwide stock market crash, leaving a lasting impact on the financial industry. In 1993, “Fintech” was the original name of the Financial Services Technology Consortium, initiated by Citicorp. This project aimed to overcome the reputation of resisting technological collaboration with outsiders.

The late 1990s saw significant advancements in digital banking. Wells Fargo became the first bank to offer an online checking account, while virtual banks without physical branches emerged. ING Direct launched in Canada as a subsidiary of the ING group, pioneering the concept of branchless banking.


Fintech 3.0 (2008 – 2014)

The financial crisis of 2008 marked a turning point for fintech. The crisis, which brought the global financial system to the brink of collapse, highlighted the need for innovation and increased transparency in the industry. In 2009, the release of version 0.1 of Bitcoin SW introduced blockchain technology to the world. Bitcoin’s decentralized and secure nature challenged traditional financial systems and paved the way for further fintech advancements.

Major tech companies also entered the fintech landscape during this period. Google introduced Google Wallet in 2013, enabling users to make purchases from their mobile phones using NFC technology. Apple followed suit in 2014 with the launch of Apple Pay.

Fintech 3.5 (2014- present)

The years from 2014 onwards witnessed a non-linear rise in fintech, particularly in China and India. These two populous countries, devoid of large chains of complex physical banking infrastructures, experienced rapid growth in the fintech sector. China, in particular, transitioned from a mono-banking model to having over 80 banks and 2000 P2P lending platforms.

This period also witnessed significant fintech developments in Africa, such as the introduction of M-Pesa, a mobile phone-based money transfer and financing service. Moreover, countries like India saw the emergence of payment banks and financial software developed by Indian IT companies. Alipay in China and various fintech developments in Africa and India acted as growth engines during this period. (1)

Major drivers

The emergence of fintech as a prominent force in modern finance innovation has been driven by various factors. To understand the underlying drivers and dynamics, it is crucial to analyze the topology of fintech (2). This comprehensive examination encompasses key areas such as a) finance and investment, b) operations and risk management, c) payments and infrastructure, d) data security and monetization, and e) customer interface. Exploring these dimensions provides a valuable vantage point to understand the transformative influence of fintech on the financial industry and its ongoing evolution.

In the realm of fintech, various dimensions drive its impact on the financial industry, shaping its evolution and fostering innovation. Alternative financing mechanisms like crowdfunding and peer-to-peer (P2P) lending have emerged as significant focal points, disrupting traditional financing models by directly connecting borrowers with lenders. Looking ahead, fintech’s expansion into robo-advisory services, powered by artificial intelligence (AI) algorithms, provides automated investment advice, diversifying the range of financial services available. This diversification responds to the need for alternative funding options, exemplified by initiatives such as the European Investment Bank (EIB) in the EU (3), emphasizing the importance of developing new channels to access capital.



[1] Look: The Role of Financial Technology (FINTECH) in Changing Financial Industry and Increasing Efficiency in the Economy, page 3


[2] Look: Social Entrepreneurship in the modern world: trends, challenges and development prospects, page 9


[3] Alternative Finance Forum of EIB


[4] https://explodingtopics.com/blog/fintech-stats




Arner, D.W., Barberis, J.N. and Buckley, R.P. (2015). The Evolution of Fintech: A New Post-Crisis Paradigm? [online] papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2676553.


KPMG. (2023). Pulse of Fintech – KPMG Global. [online] Available at: https://kpmg.com/xx/en/home/industries/financial-services/pulse-of-fintech.html.


Zeidy, I. (2022). Common Market for Eastern and Southern Africa Special Report The Role of Financial Technology (FINTECH) in Changing Financial Industry and Increasing Efficiency in the Economy. [online] Available at: https://www.comesa.int/wp-content/uploads/2022/05/The-Role-of-Financial-Technology.pdf.


Plekhanov (2022). PERM INSTITUTE (BRANCH) OF FEDERAL STATE BUDGETARY EDUCATIONAL INSTITUTION OF HIGHER EDUCATION ‘Social Entrepreneurship in the modern world: trends, challenges and development prospects’ (Russia -Malaysia -Belarus -Kyrgyzstan -Uzbekistan) Perm 2022. [online] Available at: https://rea.perm.ru/images/Download/6Nauka/13Sborniki/sbornik%2027.10.2022.pdf#page=7


(PDF) The Evolution of Financial Technology (FINTECH). (n.d.). ResearchGate. Available at:



www.platis-anastassiadis.com. (n.d.). FinTech and the Law: Current Trends and Developments. [online] Available at: https://www.platis-anastassiadis.com/en_gr/legal-insights/fintech-and-the-law-current-trends-and-developments [Accessed 15 Jul. 2023].

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