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Fintech or internet, which came first?

Fin Tech and mobile computing concept. Hand holding tabletWe were completely shocked to hear that the term ‘fintech’ is not a brainchild of the noughties, but was coined as far back as 1972, when financial technology, as we know it today, may well have been unimaginable.

This was the same year that the first hand-held calculator was introduced onto the market by Hewlett-Packard at a princely $395 and was about the extent of publically-available fintech tools at the time

It is only thanks to Professor of Finance at Toulouse Business School, David Stolin, who unearthed what may well be the first mention of ‘fintech’ ever, that we can now share this with you. In August 1972, Interfaces, then a respected journal focussed on the practical applications of operations research and management science, featured a two-page article titled FINTECH – A Series of 40 Time Shared Models Used at Manufacturers Hanover Trust Company.


Foreteller of fintech


The article was written by Abraham Leon Bettinger, Vice President of Manufacturers Hanover Trust, a New York bank, no less! The article starts as follows: “Over the last four years, Manufacturers Hanover Trust Company’s Operations Research Department has developed approximately 100 models that are currently used throughout the bank. A group of 40 models has been set aside and designated as FINTECH. FINTECH is an acronym which stands for financial technology, combining bank expertise with modern management science techniques and the computer.” 

Who would have thought it? The very sector that Fintech is disrupting decades later is the same one that coined the term, with a not too dissimilar definition at that! Although times have very much changed, with computer time sharing having given way to cloud computing, and many cutting-edge financial applications of the Nixon era today easily included in a spreadsheet, Bettinger’s original description is spookily prophetic.

His article on his 4-part software package concludes by stating that “senior management has decided to market this package to its correspondent banks and corporations. It is felt that these problems and their respective solutions are not unique to this institution but rather that they have global appeal.”


Fintech resurfaces decades later


Unfortunately, Bettinger, who was the driving force behind this early fintech, passed away in 2003. His career at Manufacturers Hanover came relatively early on, and was followed by positions at investment banking firm Keefe, Bruyette & Woods and finally at his own consulting firm, Bettinger & Leech, where he was chairman. His business partner, Richard Leech, describes Bettinger as “a brilliant mind, a quant pioneer, and someone with a deep knowledge of both software and banking”.

So what became of fintech following Bettinger’s article until the twenty-first century?

Interestingly enough, while Wikipedia usually provides historical context for modern terminology, on fintech, Wikipedia offers no early history of the term or when it became widely used, only citing use since Kantox has been in existence.

Profesor Stolin presumes that Bettinger’s package continued to be used at Manufacturers Hanover, but did not find wider general use. As far as we know, fintech was parked alongside it until its modern revival. Manufacturers Hanover itself merged with Chemical Bank in 1991, which then merged with Chase Manhattan in 1996 and then J.P. Morgan & Co in 2000. Finally, of course JPMorgan Chase, America’s largest bank, was born. The bank’s CEO James Dimon has famously said of fintech companies that “they all want to eat our lunch. Every single one of them is going to try”. An ironic tale indeed!

So, what came first, the chicken or the egg? Well, that depends, the internet was born just three years earlier, in 1969, but was not really rolled out till the mid nineties… Did you guess it?