Wars and crises all create new changes in human history. The Great Depression of 1930 led to the birth of fascism. World War II led to the change of the world order from unipolar to multipolar (Soviet – American). If the global financial crisis in 2008 did not occur, would Fintech have grown as strongly as it is today?

Global financial crisis

One autumn afternoon in 2008, Wall Street …

A middle-aged man with a messy hair, lying down next to a wall street cow, symbol of the New York Stock Exchange. Beffort was once a Wall Street old wolf with a million-dollar fortune, but today he lost everything, his home, his money, his job …

On September 15, 2008, Lehman Brothers, one of the major US investment banks went bankrupt, the collapse of the financial empire led to the global financial crisis in 2008. A crisis like a tsunami swept it all away, making people like Beffort empty handed overnight

Major stock markets of the world in New York, London, and Tokyo all have a time of historical depreciation. In Vietnam, the VN-Index also dropped more than 70%, tens of trillions of market capitalization evaporated in just a short time, many investors exhausted their assets and fell to the dead.

The root cause of the 2008 financial crisis was the real estate bubble and credit crunch. But it is said that there are also the hands of economic assassins, mysterious bank tycoons ….

The birth of Fintech

However, there is always a chance in danger. If the Great Depression of 1930 led to the Second World War, after the global financial crisis in 2008, a wave of start-up companies focused on Fintech sectors such as Stripe, AliPay, Paytm … rise.

In Vietnam, many Fintech startup companies have been established, such as Momo, famous for its online payment wallet application, Zalo Pay of VNG, and management of personal financial data such as OnePay, Mobivi.

So how to understand correctly what Fintech is, it is the application of information technology in financial services activities. New technologies such as Machine Learning rely on BigData to analyze stock index forecasts and support investors’ decision making. Blockchain is applied in KYC (Know Your Customer) verification process…

FPT Software deploys UTOP, an online payment application based on Akachain platform (Blockchain ecosystem built on Hyperledger)

Akabot, another FPT product, combines with AI platform to automate processes in banking, insurance…

Alibaba develops an Alipay e-wallet to pay online in China with more than 150 million users

And the most famous is Bitcoin, a digital currency that uses blockchain technology, for non-bank transactions. Silk Road, an online black market, part of the DeepWeb underworld has used Bitcoin for its drug and weapons transactions.

These applications are all products of Fintech.

Fintech and banking – cooperation or confrontation?

Experts have predicted that the Fintech wave will knock banks operating in the traditional way, not keeping up with technology, warning that Fintech should be considered a big threat. Especially in the field of electronic payment, Fintech companies are competing and occupying the bank’s market share.

Europe, 2016, 8 leading banks had to lay off 100,000 employees due to the impact of Fintech

Deutsche Bank, Standard Chartered lost over $ 420 billion by the rise of Fintech.

The confrontation between Fintech and the bank is like a battle between wolves and lions.

But in reality, Fintech is gradually changing the traditional banking system. Banks are gradually approaching and applying Fintech technology because it is the world’s technology trend to avoid lagging behind.

 J.P. Morgan Chase & Co.‘s leaders, Jamie Dimon once called digital currencies by the names “scam” and “tulip bulb”. Vietnamese commercial banks also do not accept digital currencies due to concerns about money laundering and terrorist financing

However, with the development of blockchain technology, Bitcoin digital currency, Ripple has gradually been accepted by major banks, considering it as the 2.0 dollar.

Bank of America has tested Ripple DLT for cross-border transactions

In August 2015, Barclays became the first major bank in the UK to accept Bitcoin, starting out by allowing users to make charitable donations using this currency.

Fintech and the bank have moved from confrontation to dialogue, cooperation and development in the form of WIN-WIN

Techcombank has joined with fintech Fastacash Company to introduce [email protected] Mobile feature, a fast way to transfer money via Facebook and Google+.

Lotte Card, a subsidiary of Lotte Group Korea, a Fintech company in South Korea, has just acquired the acquisition of Techcom Finance, a subsidiary of Techcombank Vietnam, to develop the eKYC system to identify the borrower.

Conclusion

Wars and crises all create new changes in human history. The Great Depression of 1930 led to the birth of fascism. World War II led to the change of the world order from unipolar to multipolar (Soviet – American). If the global financial crisis of 2008 did not occur, would Fintech have grown as strongly as it is today?

Do Trong Nguyen – FPT Software

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