Finance Meets Technology: How it Evolved in the Modern Times

From daily operations to budget plans, business processes today are integrated with technology. 

Technology has come a long way since the creation of the UNIVAC, the first commercially produced digital computer, in 1951. From less than 7% to more than 50% in a couple of decades, the percentage of people online has skyrocketed. Similarly, 740 million cell phone subscriptions worldwide in 2000 became 8 billion in 2020. 

Innovation is on everyone’s mind, and technology is at the forefront. In the 2020s, technology is more accessible than ever, contributing to the development of individuals, communities, and businesses. For more than half of companies, spending on technology is a priority: 53% expect to increase their Internet Technology (IT) budget in 2022.

Technology has similarly brought many improvements to financial institutions. In the digital age, financial technology has added to the capabilities of banks and financial institutions.


While banking is recorded to have existed since ancient times, the structures of modern financial institutions can be traced to 1776 when Adam Smith introduced the “invisible hand” concept. Since then, banking and the economy were no longer under the sole power of the state. The finance industry has evolved continuously throughout the years. 

Innovation resulted in milestones like the first electronic fund transfer in 1918 and the first credit card in the 1950s. These analog innovations were the first instances of financial technology or fintech.


According to FSB, financial technology refers to “technology-enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on the provision of financial services.” 

Generally, fintech involves using technology to improve business processes and introduce alternative methods of accomplishing tasks. Fintech is predicted to reach a value of $305 billion by 2025. From ATMs to cybersecurity, a lot of us are already using fintech in our daily lives. 

Here are common ways we use fintech without realizing it:

  • A barista enters your coffee order in a cash register that automatically lists it down and prints out a receipt.
  • A friend who runs her own business exclusively operates online and only accepts online payment.
  • You check your bank balance through an app on your smartphone.

Emerging technologies based on blockchain, insurance, and machine learning also provide different ways to increase efficiency and provide better service. The rationale behind fintech is “disruption,” a strategy that changes the status quo. Fintech today is used by banks, individuals, and businesses.

Here is how fintech changed the game.

Fintech made electronic payments possible.

Every time we send money to a friend or our employers pay us digitally, we benefit from a concept introduced in the 1870s—Western Union’s electronic fund transfer, the first of its kind. The ATM, meanwhile, was created in 1967, which is also an innovation born out of fintech.

Cryptocurrency took finance to the next level with Bitcoin, which provided a decentralized way of banking in 2009. Today, there are many cryptocurrencies in the market alongside Bitcoin, like Ethereum and Tether. In 2019, digital and mobile wallets were the top payment method (41.8%) used by ecommerce shoppers. This is predicted to go up to 52.2% by 2023.

Fintech is responsible for the convenience and accessibility of electronic payments.

It improved customer service.

Artificial Intelligence (AI) has made a big difference in providing easier ways for businesses to connect with their customers. 

Financial services are one of the top three industries to benefit from AI—67% of fintech companies believe that AI will have the biggest impact on the industry in the next five years. Businesses utilize AI through chatbots, client categorization, and predictive analysis

These AI-based technologies provide valuable information for a better and more personal customer service experience. By utilizing AI, financial institutions can better communicate with customers and efficiently meet their personal preferences.

Streaming service Netflix uses predictive analysis to personalize recommendations

It paved the way for better security.

Businesses lose about 5% of revenue to fraud yearly, according to the Association of Certified Fraud Examiners. In the Philippines, 57%  of small- and medium-sized businesses (SMB) were victims of cybercrime. Money laundering and identity theft are some of the most common types of financial institution fraud.

By using measures like authentication, automation, and access monitoring, businesses can keep their systems and information more secure against fraud and theft. 

Pros and Cons of Digitalized Finance


  • Fast: Technology has made lending processes quicker without sacrificing accuracy as it is no longer necessary to go to a bank to avail of certain services.
  • Accessible: Developing technologies bring opportunities for more transparency and accessibility. Fintech enables the “unbanked” to gain access to financial products and services. Financial freedom is now a reality for these people.
  • Secure: With the digital landscape, businesses are keeping themselves safe from cybercrime and hacking with security tools. Two-factor authentication and other measures are protecting customers, as well.


  • Regulation Gaps: Unlike traditional banking institutions, digital financial institutions are not always subject to the same rules due to a lack of regulation.
  • Too Personal: An increasingly relevant concern is access to user data for targeted advertising. Open banking resurfaced as an answer to this problem, allowing customers to access and control their data.

Finance and Technology

The evolution of financial technology has provided many advantages like improved security and digital money transfers. As fintech evolves, conversations about regulations and data are vital in improving customers’ trust. What cannot be denied is the continuing advancements in fintech, and businesses are already taking notice.

Guest article written by: Carlo Rosales. Carlo is the Chief Marketing Officer of—the online insurance marketplace dedicated to making insurance more accessible for Filipinos. With years of expertise in building brand awareness, user engagement, and ROI-driven marketing campaigns, Carlo never fails in bringing brands and products to life. Outside of work, he enjoys spending time with loved ones, discovering new things, and travelling. 

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