What is fintech?

Fintech is a monopoly that has collected a great deal of data about us, therefore working quickly and efficiently.

 "Ant, spun off from Alibaba, an e-commerce firm, it has over 1bn users, mostly in China, and its payments network carried $16trn of transactions last year, connecting 80m merchants. Payments are just the appetiser. Users can borrow money, choose from 6,000 investment products, and buy health insurance. Imagine if main-street banks, Wall Street's brokers, Boston's asset managers and Connecticut's insurers were all shrunk to fit into a single app designed in Silicon Valley that almost everyone used.

Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking's profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy IT systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people's deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech "platform" firms could grab more power from individuals. Network effects are integral to the fintech model--the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party's apparatus of control--one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash." [1]

Lithuania does not have a large enough market and money to create fintech monopolies. Therefore, Lithuanian fintech works according to the old reliable Sekundės model - to collect as much money as possible and leave Lithuania with your money on time. Vasiukai was the capital of chess, and Lithuania is the capital of fintech.

"O 1. "On the march; China's fintech champion." The Economist, 10 Oct. 2020, p. 16(US).