FinTech Today

With so much going on in the world, everyone is looking for a safer yet fruitful option to park their money. Never in recent history, have we seen an economic cycle skipping recession for this long. As we all know, the typical economic cycle consists of a recession every 7 years and GFC being the last recession, it's been more than 13 years since we have seen a recession. The market is filled with talks about an upcoming recession and it's not recent, investors are preparing for a recession since 2016. Warren Buffet very well said 'Buy when there is blood on the street', has been accumulating cash but has not been able to find the right time since 2016 which is leading Berkshire Hathaway with huge cash reserves.  These past 2 years have changed the economic circumstances drastically. We have seen so many unprecedented activities such as the oil crisis, land conflicts, Economies moving away from Globalisation, the Russia-Ukraine war and how can we forget Covid-19! In add...

Read Time: 4 mins In the simplest way possible, let's learn how a stock market works, what drives the price of a share price, what are indices, how indices represent the position/health of a market, and how the overall market gets affected when an event such as a global pandemic occurs. So what is a stock market? A stock market is a place where people buy and sell shares, a subliminal analogy will be exchange websites such as eBay, OLX etc. What happens there is that person A is selling a share of company X and person B is buying that share from person A, but the catch is that the trading platforms(Zerodha, Angel Broking) act as an intermediate for regulation purposes & much more but those details are out of the scope of this blog. So what makes one person sell a share and another person buy that same share. Let's assume that Company X's share price is $10 and I think that the performance of the last few years is good so the price might go up to $12(guesstimate) in 1 ye...

Read Time: 5 mins Now we have all seen the turmoil which the coronavirus has created for all of us. We have been seated all the while, seeing our economy shrinking, countries such as Germany and South Korea entering a state of recession because of COVID dragging down their exports, the death rates escalating, the desperation to get nominal healthcare facilities, and much more!  Talking about the stock markets, Dow Jones IA, FTSE 100, NIFTY all plunged by 40%,35%, and 38% respectively . Now we know that the race for the vaccine is ongoing and when will these unprecedented time end, we have no clue. Will we see a second wave? Will the vaccine work as the virus is a mutant? We have no idea but what we know is that the economy is recovering! So let's have a look at how economies usually recover! This is not the first time the economy has shrunken by this much, we have seen worst in the past and have recovered from it and so we will from this pandemic. During the Great Depression1929, w...

Read Time: 3 mins We all have heard of Bitcoin and many other cryptocurrencies over the past few years. So let's have a look at what cryptocurrency is, what blockchain is, how does blockchain links to cryptocurrency! Let's dive straight into cryptocurrency and see what it is! By definition "A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets." The easy one : "A cryptocurrency is a digital currency that is created and managed through the use of advanced encryption techniques." A few keywords that you need to know when talking about cryptocurrency are as follows: Wallet A place to store your cryptocurrency credentials: namely your private key  Private key A 256-bit number expressed as a hexadecimal  Eg: 9873D79C6D87DC0FB6A5778633389F4453213303DA61F20BD67FC233AA3326 NOTE:   ...

Read Time: 4 mins As we all know amid the coronavirus crisis, the USA has cut the Fed rate to 0% to increase liquidity and furthermore to prevent the market to fall, whose probability currently stands at more than 50%. Let's have a look at what the current scenarios are in the global market and let's understand what this rate cut from the very basics. Market Volatility  Currently, the market stands at a very thin rope and can head to any direction based on the changes in the global circumstances. In brief, the factors such as the pandemic coronavirus, the oil price war between Russia and OPEC, the conflicts between US and Mexico, the Isreal-Palestine issue and many more stand as the core reason behind such volatility in the market and especially the lockdowns due to Coronavirus is affecting a lot of markets globally. To understand more about the factors affecting the market, I'll suggest a read to this blog on "Why the market is plunging" .  With such ...

Read Time: 3 mins Today as we all see that the market is plunging by margins that none of us expected or are willing to believe. As in today's world, problems are solved on a global level due to globalization, so are the creation of problems. One problem leads to another and that leads to another thus creating a domino effect. This is a big reason why we are seeing such a drop in the market worldwide. Looking back at how 2020 started for us we can easily understand the domino effect. Starting with the Trade war between US-China, then Israel-Palestine conflict, the death of Soleimani i.e. the US-Iran conflict, then CAA-NRC conflict in India, the climate issues addressed at Davos 2020, and the current pressing issues of Russia and OPEC oil pricing war and the pandemic Coronavirus, all these are the ripples that create a convolute path for the understanding of the downfall in the global market. First, let's see what is the status of the global market and a few top compani...

Read Time: 5 mins The Global Financial Crisis was the downturn in the market that took place from mid-2017 and lasted until early 2019. Also known as the United States subprime mortgage crisis, the reason behind the crisis, as is well understood by the name, was the housing market of the US. The US housing market was valued pretty high due to lots of misinformation, this misinformation came into the knowledge of experts in mid-2017 and investors started taking money out of the market and as the awareness spread, more people started moving their money leading to the domino effect which led to the crisis. How it all started? In 2001, as we know, the U.S. economy experienced a mild, short-lived recession which happened due to multiple reasons such as the dot-com bubble, 9/11 and multiple accounting scandals. Although the economy nicely withstood the terrorist attacks, the accounting scandals and the bust of the dot-com bubble, the fear of recession really preoccupied everybody...

Read Time - 2 mins The Recovery of financial services, especially Banks, is a mix of positive and negative growth. As we know many banks were able to come out of the global crisis without much effect, however, some banks made it with a bare minimum in their pockets to survive and all have done the aftermath really well to recover from the crisis and to generate profit for the economy. As we know that Lehman filed Chapter 11 bankruptcy with a loss of $600 billion and Merrill lynch barely made an escape with the help of Bank of America. Let's see where the top-notch banks are and how they performed over the last decade since 2008. The list of banks that we'll be analyzing will be: J.P. Morgan Wells Fargo Bank of America Goldman Sachs  Citigroup Morgan Stanley As you can see that J.P. Morgan and Wells Fargo are the only 2 banks that have advanced in a better way then they have from 1998-2008 than from 2008-2018. Goldman Sachs was able to maintain similar g...

Read Time - 4 mins History of Lehman  It all started in 1844, when Henry Lehman, a German immigrant, came to Montgomery, Alabama and started a small general store in 1844. Henry Lehman and his brothers, Emanuel and Mayer, later founded Lehman Brothers in the year 1950. The company that started by selling dry-goods moved to cotton trade. After the death of Henry  Lehman, in 1855, the other brothers expanded Lehman Brothers and started commodities trading and brokerage services. To complement the growth of the U.S. economy, Lehman Brothers prospered over the decades and reached a value of $600 billion before the collapse in 2008. Although, Lehman has overcome a lot of challenges over the years such as the railroad bankruptcies in the 1800s, the Great Depression in the 1930s, both world wars, the American Express spun off in 1994, the Long Term Capital Management collapse alongside the Russian debt defaults in 1998, the global recession or the subprime mortgage crisis wa...

Read Time - 3 mins Let us see how FinTech gained traction and how it has evolved in the last 2 decades. As we all know that FinTech is not anything new that has originated from a Pandora's box and has existed since the 1950s. In this article, we'll focus on how has it grown in recent years, what was the need for FinTech and how it took such an elusive pace. How the world started heeding FinTech? As the saying goes "In the middle of difficulty lies opportunity", the FinTech startups saw the opportunities during the Global Financial Crisis of 2008. To understand this, let's understand what the global financial crisis was and how it impacted millions of people.   The Global Financial Crisis centered in the US was a downturn in the housing market of the United States. Easier lending processes and the erroneous AAA accreditations of multiple mortgage-backed bonds were the catalysts for the financial crisis. Millions of peoples lost their jobs, multiple ban...

Read Time - 3 mins Shortened for Financial Technology, FinTech is basically a combination of Financial Services and Technology. As the world is advancing more in the technical field and with such advancements in Machine Learning and Artificial Intelligence, the accessibility and accuracy are growing at an elusive pace wherein we all are left with no other option than to adapt to FinTech. Emerging in the 21st century, any innovation which in terms is related to Financial Services and is done with the help of technology can be categorized under FinTech. At its core, FinTech can be used by anyone and everyone and if you observe carefully, we all are surrounded by FinTech and it comes into the picture every time you make payment. There are certain categories in the Finance Sector that are adopting to FinTech or have already adapted to it, there are some huge and recent implementations of FinTech at a global level and to talk a few: Bitcoin is accepted by companies such...