Financial Technology

Financial technology—or “fintech”—is a class of emerging technology and innovation used and applied in many industries, including financial services. As fund companies increasingly incorporate financial technology into their businesses, it is becoming more important for fund directors to understand how it works.

Examples of financial technology include:

• Blockchain. A digital database containing information (such as records of financial transactions) secured by cryptography that can be simultaneously used and shared within a large decentralized, publicly accessible network.
• Cryptocurrency. Any form of currency that only exists digitally, and that usually has no central issuing or regulating authority but instead uses a blockchain system to record transactions and manage the issuance of new units.
• Robotic process automation (RPA). Software that can be programmed to perform rote, routine tasks usually performed by humans.
• Artificial intelligence/machine learning. An area of study in computer science working to program computers to mimic the learning and thinking abilities of a human.