An Overview of FinTech: Origins, main market segments and in-demand positions
In this article, I would like to talk about FinTech’s background, its main services, and positions currently available in Japan’s FinTech industry.
1 - The Origins of FinTech
13 years ago, the Lehman Brothers collapsed in the U.S., and many people working in financial institutions headed for Silicon Valley, the Mecca of IT companies. At the same time, a lot of consumers were dissatisfied with conventional financial services and wished to see new forms of financial services emerge and develop.
The Lehman shock and the development of IT technology combined together led to the development of FinTech.
2 - The rapid development and expansion of FinTech
The rapid expansion of FinTech is directly linked to the spread of smartphones that gave most people access to the Internet at any time. Companies that provide services are now able to accumulate and analyze data from consumer purchases, usage, SNS, and other logins. They are also investing more and more in the development of their services.
3 - FinTech market segments and in-demand positions
Let's take a look at 4 of the main FinTech segments and some of the positions that are available here in Japan.
A. Payments
The American company Paypal has pioneered the FinTech field. After initially entering your personal information and credit card information, you can make payments without having to re-enter your card information every time you make a purchase.While Paypal specializes in online payments (e-commerce, etc.), services such as Paypay and LINE Pay can handle both offline (in-store payments) and online payments.
★ Available positions
Sales: offline and online sales to grow the number of stores using payment services
Marketing: new customer acquisition, CRM Marketing for existing customers
B. Money transfers
Financial technology can also be used to transfer money without having to go through a bank, allowing quick and cost-effective money transfers from user to user (peer to peer or P2P payments). Wise is a typical example of a company that provide such services. It charges a fraction of the traditional money transfer fees and completes online deposits within 24 hours.
★ Available positions
Fraud Monitoring: managing and promoting the creation of a system to check for fraudulent transactions
Customer Support: supporting users in using the service and handling problems related to service use.
C. Loans and Financing
There is also a growing presence of services that directly connect investors with companies and individuals, without needing the intermediary of a bank, to obtain low-interest loans or funding. LendingClub in the U.S. and Campfire in Japan are classic examples of such services.
★ Available positions
Business Development: planning and implementation of plans to promote entrepreneurship and business in local areas in collaboration with local governments and regional banks.
D. Asset management
There are services, such as robo-advisors, that provide automatic AI support for asset management. When opening an account, you can select your age, investment experience, risk level etc. After that, a personalized investment portfolio will be automatically generated by the AI support. Another attractive feature is the periodical rebalance that is done simultaneously with an analysis of the market situation.
Typical services include Wealthfront in the U.S., WealthNavi in Japan, and SMART FOLIO operated by Mizuho Bank.
★ Available positions
Quantitative analyst: understanding domestic and international financial market trends, and developing and improving asset management algorithms.
These are the 4 main fields and services you can find in FinTech. Some of you have probably thought that FinTech is a complex field. But, hopefully, reading about it in this article made you realize that FinTech is actually surprisingly familiar and approachable.
If you are interested in any of the FinTech fields we have mentioned, or any of the open positions, feel free to contact us.
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Takuma Mori
Team Leader | Financial Technology