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Financial Technology and Innovative Financial Inclusion

Financial Technology and Innovative Financial Inclusion

Sumarsono (Universitas Islam Negeri Sunan Kalijaga Yogyakarta, Indonesia), Abdullah Al-Mudimigh (Dar Al Uloom University, Saudi Arabia), and Muhammad Anshari (Universiti Brunei Darussalam, Brunei)
Copyright: © 2020 |Pages: 11
DOI: 10.4018/978-1-5225-9183-2.ch006
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Abstract

A portmanteau of financial technology (FinTech) centralizes on the innovative use of smart mobile devices to design and deliver financial services and products, elevating an innovative way of delivering financial services. The chapter mainly focuses on the definition and the importance of FinTech to the financial ecosystem especially in the Southeast Asia region. It focuses on how financial technology (FinTech) came to be, how transactions in the past mostly use cash, and then shifted to credit card and then shifted to a cashless transaction, for example using e-wallet or simply using smartphone for any financial transaction. The research found out how the huge percentage of internet users in the Southeast Asia region were the cause of the development of FinTech companies in the region for FinTech startups. It also showed how FinTech helped to provide solutions for financial inclusion, especially unbanked population.
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Definitions And Scope

There is no concurrence in defining what FinTech exactly is. But many different authors have made attempts to define FinTech according to their own understandings drawn from their conveyed studies and surveys.

Dorfleitner (2017) stated that FinTech represents companies that offer financial services which incorporate advance technologies. Besides providing digital products and services explicitly designed for the banking and financing sector, there are also FinTech that in charge of distributing insurance. These types of FinTech are often called InsurTechs. In addition, it may also offer several of third-party services for instance, providing technical solutions for financial services providers.

According to Schindler (2017), FinTech refers to financial innovation made possible using technology comprising a broad range of services for instance, online marketplace lending, equity crowdfunding and financial applications of machine learning. It is also similar with Arner (2015) who expressed FinTech as the whole stretch of services offered by finance industry which is greatly supported using advance technology.

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