FinTech, which by definition is adding technology to finance, does not refer to just one type of technology. When we talk about FinTech, technologies like blockchain, big data, artificial intelligence and electronic currency are also mentioned. FinTech is an aggregation of various technologies; however, each technology is evolving day by day. FinTech is being recognized as a representative technological innovation symbolizing our time.

Until now, human civilization has been developed by technological innovation. Technological innovation has been the engine to produce new products and thus, new products have created new markets and inevitably a new world. By looking at automobiles, which were invented just over 100 years ago to replace horse-drawn carriages, or smartphones, which became mainstream 10 years ago when line telephones were the general trend, the world we live in now can be clearly distinguished as pre- and post- technological innovation.

Changes created by technologies are new and can be surprising at first. However, as time passes, such changes become infused into everyday life, and such initial surprise becomes dull. If FinTech claims itself as a technological innovation, the future of FinTech can be quite obvious.

Now, customers are excited over the new business models that come with using FinTech, such as easily transferring money overseas and not having to use certificates on an account transfer.

However, as time passes and FinTech as a technology permeates into the activities and habits of our everyday life, customers will become oblivious to using it. As we breathe naturally without recognizing the existence of oxygen at every moment, customers may organically use the business models of FinTech without even noticing. When this time comes, the term FinTech will also be refined to be understood as a typical, conventional technology.

Customers from all demographics are uninterested in technology itself. For customers, their happiness is the only importance. The customers’ only concern is how much their lives improve with technology. That is to say, it is much more important that there is no fee rather than not having to use certificates for account transfers.

From the point of view of companies, FinTech is a technological innovation that leads the next business models; however, from the point of view of consumers, FinTech must not be a technological innovation -- FinTech must be the means to bring happiness to consumers. Therefore, the direction that FinTech should aim for must target service innovation.

Service innovation understands technology from the consumers’ perspective and selects suitable technologies to fulfill consumers’ happiness. Further, it improves the inconvenience, dissatisfaction and anxiety that consumers face, particularly surrounding financial services. It must be the objective of FinTech to solve these negative elements with the power of innovative financial technologies and provide satisfaction to customers.

For instance, no matter how technologies have been developed, financial fraud schemes, such as voice phishing, are still at large. Even those with great financial knowledge and social experiences can become victims of voice phishing. As technology develops, cyber criminals collect big data and choose their targets using artificial intelligence. The deceived targets then easily send money with electronic currency using smartphones. During this fraudulent process, both the criminal and its victim use the new technologies of FinTech. By the time the victim realizes what is happening, it is usually too late -- the money is gone without a trace. There is always lingering danger during the processes of cash deposits, withdrawals and transfers between accounts.

However, despite these dangers everyone must use finance. The technology used in the process of financial fraud is FinTech; however, the technology to protect consumers should also be FinTech. Undoubtedly, FinTech must aim for service innovation. After the direction of FinTech is set, which is to succeed via service innovation, consumers must participate during every process of such innovation. If companies force their customers to use FinTech from only the viewpoint of technology, a new market cannot be created. Without input from customers, FinTech alone will never be enough to change the world. Technologies and business models that fail to truly address the needs of consumers is just a storm in a teacup.

By Yoon Tae-sung

Yoon Tae-sung is a visiting professor at School of Business and Technology Management and Graduate Program for Innovation & Technology Management in KAIST. -- Ed.

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