It might not seem like the status quo is moving very quickly, but considering the molasses-like pace of progress in centuries past, the finance sector is practically sprinting.
The last ten years are largely responsible for this trend, and there are several reasons why the period was so transformative.
Regardless, the small revolution happening in global finance has had a welcome influence on many business processes.
One of the hardest hit is how a company raises capital. (See also: Bank Stocks’ Big Surge Turns Into a Tailspin) Setting the Scene The first catalyst for today’s changed banking sector is almost exclusively the financial crisis of 2008.
In a world where banks had clearly overextended themselves only to lay the cost of their mistake on the public, things had to change.
Countries like the United States and those in the European Union established laws for greater transparency of information, forcing banks who had once operated in the dark, keeping track of their operations with mountains of paper files, to open the books.
The Revolution Manifest
One of the first areas where the revolution manifested itself was in lending.
Before, a business would meet with a banker in person, hand over the veritable box of documents they had collected, and then wait weeks to hear if they’d been approved.
With fintech companies given the go-ahead to digitize the slew of new information now at their fingertips, the loan approval process suddenly became a whole lot easier.