The changing financial world
Credit to Author: MARIA KAILA BALITE| Date: Fri, 22 Feb 2019 16:24:22 +0000
My Money and Banking class in De La Salle University taught me that the financial world has a long history that dates back even to the beginning of the human race. Our earliest ancestors began as nomads – they feasted on fruits from trees and the animals around them. As time passed, they began to settle, learned to use tools, and grow crops and livestock. However, growing certain kinds of crops and herding livestock did not provide one with all his needs. As a solution, our ancestors started developing a system of trade that enabled them to exchange one necessity for another—a system that now has a long history behind it and we still use even now.
Barter
The era of financial transactions started as our ancestors began trading goods among themselves.
As an example, meat was traded for an equivalent amount of cloth, which means that humans started putting value on these items. Naturally, some goods were deemed more precious than others.
Salt and gold
Salt easily became one of the most valuable goods as it proved useful in seasoning and preserving food, cleaning, and many other practical uses. Thus, it wasn’t long before goods were valued according to how much salt they can be traded for, making salt the first ever mode of currency.
This later on transitioned to metals, as our ancestors started putting more value in metals as soon as aesthetics became a way to display wealth and power. Gold, in particular, was the most coveted among all metals as its properties allowed it to be used both for jewelry and practical use such as for armour and weapons.
Gold receipts, banking, and paper money
As people gained more and more gold, convenience was already out of the question; people started realizing that bringing a cart of gold to and from the market to buy goods is no longer physically feasible.
Not long after, financial institutions came into play as banks started offering financial services to the public. These banks kept the gold safe in their vaults and issued gold receipts to the owners, giving birth to a new form of currency which the public used to buy their goods. This is not too far from the paper money we currently use. Furthermore, banks began functioning not only as a safekeeper but also as a money lender.
Financial technology
Although traditional banking still encapsulates most of the financial industry today, financial technology or fintech seeks to offer improved financial services to all.
We take full advantage of modern technology by offering these core services, but with greater convenience and efficiency. This is done by facilitating most, if not all, transactions online; thereby eliminating struggles concerning time and logistics.
Moreover, the use of physical resources are reduced to the minimum as documentations are done online rather than on paper, allowing resources to be allocated to other important matters.
On top of this, transaction time is also decreased with the use of online platforms specifically tailored to the processing needs of the parties involved. This is a crucial feature of financial technology as the world becomes busier each day.
The fintech industry, although just starting to break the surface, holds so much potential in transforming the financial world. One of the few companies under this industry is First Circle, who provides fintech services to Small and Medium Enterprises or SMEs.
First Circle envisions a system in which financial resources shall no longer be accessible only to the selected few but also to the roots of the Philippine economy, the SME sector that makes up most of it in terms of breadth, while maximizing what modern technology has to offer.
Through this, even the smallest business owners, and ultimately their employees, are provided financial services that enable them to support their families — but with the promise of greater convenience and efficiency as compared to conventional financing. It is through this that First Circle touches the lives of many.
Maria Kaila Balite is currently an undergraduate student taking up Bachelor of Science in Applied Economics Major in Financial Economics at De La Salle University. She is part of the team behind First Circle contributing work in Credit Operations.
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