Finternet – the new financial architecture

THE 2008 global financial crisis exposed governance issues in the traditional aristocratic capitalist financial system, triggering the Main Street versus Wall Street movement in the United States. Representing the general populace, Main Street issued a strong call for the financial services industry to serve small and micro enterprises, individuals, families, and entire communities. It emphasised that more people, especially those who have not been able to obtain financial services from traditional financial institutions, should benefit. Society sought to reform the financial system of aristocratic capitalism, moving towards “inclusive finance”.

At the same time, we witnessed the advent or breakthroughs of a series of digital technologies associated with the Fourth Industrial Revolution. This series of technologies – including the Internet of Things (IoT), big data, blockchain, artificial intelligence (AI), and cloud computing – empower new application scenarios through their integration. One such scenario is digital finance, which provides financial services in a digital manner using mobile devices like tablets and smartphones. This development allows people in areas lacking physical financial infrastructure to access financial services, giving rise to online financial services and inclusive finance.

The most representative innovation in digital finance is undoubtedly the paper published by Satoshi Nakamoto on Oct 31, 2008, entitled Bitcoin: A Peer-to-Peer Electronic Cash System. The cryptocurrency Bitcoin aimed to create a “decentralised” digital cash system that does not require trust, intending to eliminate intermediaries such as banks, brokers, and credit card companies that charge high fees, are prone to fraud, and pose security concerns due to any single point of failure.