Investors are cashing in on blockchain, mobile tech and more

18 Apr 2016

As we cycle through our Fintech A to Z, you may have already noticed that the jargon is as prolific as the money to be made.

Fintech Week 2016

This language problem is exactly the reason why we’ve assembled this comprehensive guide to the fintech ecosystem.

In this edition, we bring you more jargon-busting on distributed ledgers and blockchain technology (the backbone of cryptocurrencies such as bitcoin), as well as stats on fintech investment and the significance of mobile technology.


You may have already spotted one of fintech’s biggest problems after reading through letters A to I. The jargon associated with the fintech sector can be dense and unforgiving. Just look at some of the examples on this list – internet of things, quantum computing, regtech, unbanked – even the term fintech itself elicits confusion and blank stares as often as not.

Oftentimes, the words ascribed to various areas of fintech have no other real-world applications and, frequently, the clue is not in the name. The world of finance was always relatively impenetrable to those outside of it, but fintech adds another layer of befuddlement to matters and, in doing so, puts up a wall that stops the layperson from ever truly getting to grips with the sector. More dangerously, it could prevent widespread adoption of new innovations in finance, as many of the terms may go above even the heads of the denizens of that industry.

For widespread adoption of fintech, simplicity could be the key, signalling the call for death to jargon.



Not only is fintech about money, in many cases it is where the money is at. CB Insights recently published a list of world unicorns and 20 of them came under the umbrella of fintech, with Stripe, valued at $5bn, the most highly valued.

According to London consulting firm William Garrity Associates, $50bn was invested in fintech companies between 2010 and 2015. The growth in fintech has been quite exponential, with investment in the area quadrupling from $3bn in 2013 to more than $12bn in 2014.

A new Accenture report shows that global fintech investment in 2015 grew to a massive $22.3bn, driven by moderate growth in the US and rapid growth in China, India and Germany. Now, we have figures from the first quarter of 2016, when global investment in fintech reached $5.3bn, marking a 67pc increase over the same period last year.

While concerns have been expressed that fintech may be overheating, the success of many companies makes it easy to see why the area is attractive to investors. As well as the unicorns, there are many fintech companies that have had successful exits, with Lending Club, Shopify and Square all launching IPOs, while Irishman Colm Lyon sold Realex Payments for €115m last year.



In the past year, there have been distinct signs that the traditional financial world is opening up to the potential of how blockchain and other distributed ledgers can revolutionise fintech.

Blockchain arose from bitcoin, a peer-to-peer digital currency that allows someone to transfer virtual currency to another person without an intermediary such as a bank required to process the transaction. The blockchain technology that underpins emerging digital, virtual, or cryptocurrencies consists of blocks that hold timestamped batches of recent valid transactions, forming a chain, with each block reinforcing those preceding it.

Earlier this year, the UK government’s chief scientific adviser, Mark Walport, published a report called Distributed Ledger Technology: Beyond Blockchain in which he set out the benefits of the technology and how it could be adopted by government. Bank of Ireland and Deloitte recently completed a proof-of-concept in which blockchain systems could be placed on top of existing, traditional legacy systems at the bank and used to enable traceable transactions in keeping with upcoming EU regulations such as MiFID II. Internationally, more and more banks are experimenting and even facilitating blockchain-based transactions.

In recent weeks, Barclays became the first UK bank to engage with a virtual currency company, Circle, after the UK financial regulator, the Financial Conduct Authority, granted an electronic money licence to the Boston-based company. The UK regulator’s move underpins its ambitions to make London a hub for fintech, and Circle is utilising blockchain technology to build a model for money without borders.

Circle’s new licence makes it possible to establish a banking relationship with Barclays in a move that will enable customers to send money as easily as sending a message on social media, or (for the old school among us) an SMS on a mobile device.



Banks are currently adapting to the mobile age because they have to. Globally, device sales are loaded on the smartphone side of things, with PC sales slowing down. This means customers are online all the time, wherever they go. They want access to their money and they want to see it in real-time. While interacting in branches is at its lowest ever, access is at a high.

According to a recent KPMG report, mobile is the largest banking channel in terms of transactions for the majority of banks. Ubiquitous use is expected within the decade, which reflects global device use trends outside of fintech.

Customers currently have access to lending, payments and savings from their pocket, 24-7. Numerous non-traditional financial companies have emerged providing specific, mobile-oriented services. There are even freshly created mobile-only or, at the very least, mobile-loaded banks that are prioritising UX as a major selling point.

Oddly, adoption of mobile use among banking users is highest in so-called emerging markets – reaching 60-70pc in China and India – rather than mature markets like the US, the UK and Canada.

The pressure on traditional banks to keep up with demand is twofold. First, they need to adapt their service to work well, and look good, on mobile. Second, they need to train those customers who are not technologically comfortable with mobile at the moment, thus making use of a single, unified channel.


The complete fintech A to Z

Fintech A-Z: Automation Banking Commerce Data
Economy Financing Government Hackers
IoT Jargon Ka-ching – fintech investment figures Ledgers – bitcoin, blockchain and more
Mobile Networks Open Payments
Quantum Computing Regtech Start-ups Threats
Unbanked Verification Women X-change
Youth Zug


Bitcoin image via Shutterstock