History of Technology & Banking

Advancement of Banking Technology. 

With the advent and advancement of technology, the world has undergone seismic changes. Every sector experienced innovations and progress, and that includes the Banking sector as well. If we look back, the history of technology with banking dates back to signing the first cheque. The history of technology with banking has experienced an evolution in all these years.

Let’s take a brief look at the timeline of the history of technology with Banking to see how the progress we have made in all these years:

Timeline of history of technology with banking:

  • 1871- First Wire Transfer 

In 1871, Western Union introduced the first-ever long-distance money transfer via telegram technology. The wired transfer of money aimed to provide the same convenience as today. The sender could transfer the cash at a telegram office, and using the passcodes, the operator wired the money to send it to the receiver at another location. This service aimed to provide the same convenience as today’s money transfer.

  • 1910- First Cheque

The first usage of the modern-day cheque was recorded in the 11th century in the Middle East. A paper that described and recorded financial dealings. The slips were standardized into cheques by the implementation of routing numbers for global usage by the American Bankers Association.

  • 1950- Introduction Of Credit Cards

A noteworthy success in the history of technology with banking was the introduction of credit cards. The Diners club introduced this, and it was termed as the first universal portable payment solution. This allowed consumers to buy the goods and pay at later dates. You may also know: Historical Spy Cameras

  • 1960- First ATM

 The first ATM was installed by Barcley’s bank in London in 1960. Within two years,  another branch of ATM opened in the US. With the advent of ATMs, customers no longer had to wait for long exhausting hours outside the bank or go to distinct locations for money transactions. 

  • 1960- Introduction Of Computer 

Later in the 1960s, the usage of computers was introduced, the Bank of South Wales purchased its first-ever computer for a sum of 1 million pounds. This further improvised the customer services. The usage of computers accelerated banking procedures and replaced manual processes. This brought about a great digital revolution! 

  • 1983- Step Towards Online Banking

In 1983, the Bank of Scotland facilitated its customers by allowing them to access their banks by television or telephone by connecting them to the Internet. With this, online banking became popular, and tablets were introduced to facilitate the customers even more. By the late 1990s, customers were also introduced with Paypal and p2p Money services. 

  • 2007-Mobile banking

Fast-forwarding to the era of 2000, with the launch of smartphones, a major shift in banking history was Mobile banking. In 2004, the check clearing act for the 21st century was passed through which digital copies of checks could be made and processed electronically. By 2011, Google introduced Google wallet, which allowed online payments through phones. In 2014, Apple also developed its ApplePay. Another advancement was by 2015 when Bank of America introduced fingerprint authentication and touch Id, making it safer to access backs through mobile.

Looking forward:

We have already seen the major changes that occurred in all these years in the history of technology with banking.

With more advancements in technology Cyprus, the banking sector has further facilitated the customers through Mobile apps Cyprus and provided you with statistics about your financial packages and plans.  In the years to come, customers will enjoy more feasible services from the banking sector.

Zimbabwe’s digital economy

Zimbabwe’s digital economy

It is no news to anyone that Zimbabwe has a money problem. From the late 90s until 2009, the Zimbabwe dollar reached a state of hyperinflation, which reached its peak in 2008 at 11,200,000%. This episode became infamous for the printing of notes with huge numerical values, such as the 100 trillion Zimbabwe dollars note.

In order to try to solve this problem, in 2009 the Zimbabwe government abolished the Zimbabwe dollar and announced that multiple foreign currencies would take its place in the country, including the US dollar, the British pound, the euro, the South African rand, and the Botswana pula.

However, the crisis had taken its toll, and loss of faith in financial institutions led people to hoard cash instead of storing their money in bank accounts, and the economic crisis strongly damaged their economy, leading to more imports than exports, along with other problems. Read more articles: Cloud Engineer

As a result, it didn’t take long for cash to dry out in the country. The government tried to counteract that by issuing bond notes linked to the US dollar, but it also went short. And in time, inflation started to return.

So, how could they deal with this shortage of cash? By going cashless.

Cashless?

Having no cash is different from having no money. Financial insecurity and economic instability, along with the use of the more stable US dollar, led people to hoard cash, that is, physically store their money, when having the option.

However, banks don’t really keep all of the money they store in cash format, especially when it is in a foreign currency. As people desperately tried to take their money off banks, the reserves drained. So now it is very difficult to get cash, but many people still keep money in their balance in bank accounts, and some even in foreign banks, while others store the cash they have in their houses and in safes.

As such, there isn’t a lot of cash circulating, and electronic payment became the dominant form of payment, both by bank cards and mobile phones.

The app EcoCash became the main payment service, used by individuals and companies alike. But not without its disadvantages: there are many tariffs involved in using money with it. As a result, it is common to see places using different prices for different methods of payment, with US dollar cash still being the favored option.

Does it work?

Zimbabwe is definitely not the best example of how a cashless society could work. The transition to mostly digital payments was very quick and violent, a result of a years-long economic crisis which still isn’t over. It does, however, show that it can work, and can work virtually anywhere.

Of course, Zimbabwe is not the only country that is going cashless. Sweden, for example, has been rapidly transitioning to fully cashless transactions during the last few years, and has now been relying mostly on the app Swish, the result of a cooperation between major Swedish banks and the Central Bank of Sweden. A much more orderly transition.

In Sweden, however, what is preventing them from becoming fully cashless is that cash is still available. Older people, especially the ones from rural regions of the country, are more resistant to the change, especially if they aren’t used to smartphones, and as such still prefer to use cash.

Also, being a government-backed project really helps the transition process. Zimbabweans do not have a lot of choice regarding the method of payment: it is either EcoCash, which is the most requested method, bank cards, or foreign cash. And all of them have really high drawbacks: high tariffs, insecurity, and scarcity.

Even if other similar fintechs were to appear, it would have to face the lack of economic security in the country, a steep competition with EcoCash, and difficulty getting people to adopt it, considering the low confidence in this sector of the economy.

Still, it had one fortunate, surprising side-effect: using less cash means there is one less form of transmitting the COVID-19 during the pandemic. Not to say the country isn’t struggling with it, considering its economic crisis, but it could possibly have been much worse otherwise.

Digital Life in Estonia’s unique use of Technology: e-banking & i-voting

Meet Estonia’s digital life

Since the fall of the Soviet Union and Estonia’s independence, the Estonian government has been heavily investing into the digital world, in order to not only make their citizen’s lives easier and faster, but also to attract foreign investment and improve the country’s economy.

Although, from the outside, that may seem like nothing new, Estonia’s approach to it is very innovative. The country has been moving out from “pen and paper” bureaucracy into streamlined digital processes based on the internet, through a governmental program called e-Estonia. At the time of this writing, the official e-Estonia website states that 99% of state services are now online.

Let’s see what this is all about.

Digital bureaucracy

One of the main advantages that that initiative gives to citizens is the ability to deal with governmental and private bureaucratic procedures much more rapidly and without the need to leave your home. Everything can be done using the internet.

This began in 1996 with the creation of the first e-Banking system, which is now much more widespread worldwide thanks to financial technology startups, which was then followed by systems for the government decision process (e-Cabinet meeting), tax declarations (e-Tax board), mobile parking payment (m-Parking), digitization of healthcare systems and medical history (e-Health and e-Prescription), ID card (e-ID), among many others. Everything is working everyday, 24h per day.

As a result, you get an extremely fast and transparent system which centralizes all information about you, and you can both check it out or allow companies to access it with just a few clicks. All of this powered by e-Estonia’s x-Road (a distributed data system) and blockchain technology (for cybersecurity).

i-Voting

One of the most revolutionary services they provide is probably i-Voting. The i-voting service gives Estonian citizens the ability to cast votes in Estonian parliamentary elections from anywhere in the world. The person just has to be an Estonian citizen. The Estonian government states that votes have already been cast from over 110 countries, for both national and local parliamentary elections (as they have a parliamentary government). 

This doesn’t mean that they have scrapped in-person voting. It is still available and many people use it. They estimate that only about 44% of citizens use i-Voting. But the voting process is anonymous in both cases.

The i-Voting system also comes with some advantages. Other than being able to vote anywhere you are, you are also free to change your mind at any time you want. If you decided that you no longer want to vote for the candidate you voted, you can just vote again, and the system will overwrite your previous vote, as long as you do so within the election period.

Although the system still isn’t used to institute some form of direct democracy, it already showcases the power of technology to aid governments and to make everything quicker and easier.

e-Residency

However, the most revolutionary technology implemented by e-Estonia is definitely e-Residency. If you don’t have citizenship in a European country and want your business to enter the European market, then this is the solution for you. Read more articles: Cloud Engineer

The e-Residency service is a government-backed solution that allows any person from outside of Estonia to become a “digital citizen” of Estonia, that is, an e-Resident. Although this isn’t exactly full citizenship (meaning it doesn’t come with political rights and such), it gives you the right to start and run a company in Estonia, meaning it gives you access to the entire European market.

Even better, e-Residency is fully integrated with other services from e-Estonia and follows the same philosophy: you can do everything online. You can run your entire business, open bank accounts, pay taxes and more without ever setting foot on Europe, while also enjoying an entire ecosystem of people and companies which developed around this niche.

Although Estonia is the first country to take this huge step towards being 100% digital, we can expect that, following their success, other countries will probably follow their steps in the near future, allowing our lives to become much quicker, efficient and interconnected.