I was at a campus drink vending machine not long after the university semester started a few weeks ago and noticed a new student from China trying to figure out how to use the coin-operated mechanism.

Not realising that coins have to be inserted into the slot, he took out his mobile phone and struggled to pay.

I told him the machine accepts only hard currency and he seemed unfamiliar with the procedures.

There are many ways to interpret the story. I am not sure who should be more embarrassed - the student or myself, who is probably more backward.

When societies move to the new age of mobile devices, there will be a tension of two eras co-existing together.

The student I encountered at the drink vending machine is a fast-forward version of what would become of Singapore when the new world of "fintech" arrives amid traditional finance.

And many things will change too, including how people make their investment decisions.

The old traditional financial literacy probably has to give way to a new form, a new notion of financial savviness.

I grew up at a time when financial literacy literally means just being familiar with investment choices such as stocks, funds, bonds or even just depositing the money into a bank account.

But take two financial products that are currently thriving on the online platforms - crowdfunding and cryptocurrencies.

CROWDFUNDING IS HERE

Crowdfunding is a way by which a project, usually a start-up, raises money from large numbers of people, invariably via online means.

Many would have heard of Kickstarter, a reward-based crowdfunding, born in 2009 in New York. This is an innovative platform to raise funds for entrepreneurial ideas. It was an instant hit and is still active.

The most successful Kickstarter project was Pebble Time, a smartwatch that launched in May 2015. It attracted over US$20 million in total funding, with more than 78,000 backers.

Sadly, a year later, the project failed and was sold to Fitbit. Many of the funders who pledged money for Pebble Time were left in the lurch.

The more exciting segment is crowdinvesting, which is an equity-based approach where investors receive shares or profits.

The total value of crowdinvesting worldwide is estimated to be US$11.2 billion (S$15.4 billion) this year. The big four "unicorn" (billion-dollar) players are Hong Kong, China, United States and Britain.

In Singapore, the market is worth US$90.6 million in 2018, with a year-on-year growth of 89.5 per cent from last year.

Over the next five years, this is estimated to have a cumulative annual growth rate of 52.2 per cent reaching US$486.1 million by 2022.

Familiar names in the crowdfunding market in Singapore include well-reviewed ones like Funding Societies, Kapital Boost and MoolahSense.

There are upsides attracting investors to jump into crowdfunding. To begin with, it is hip, convenient and accessible.

The minimum investment can be as low as $50. The returns for the popular platforms are quoted from 8 per cent to as high as 30 per cent.

But investors should verify that these entities in Singapore abide by the relevant regulations.

For instance, a securities-based crowdfunding platform needs a relevant licence issued by the Monetary Authority of Singapore (MAS).

If investors get involved in platforms outside Singapore, the laws of the country concerned will apply.

CRYPTOCURRENCIES FOLLOW SUIT

Yet another product - cryptocurrencies - has witnessed much interest recently.

The first cryptocurrency, bitcoin, started 10 years ago, but picked up only last year. It reached an all-time record price of US$19,783 on Dec 17 last year, but the current price is barely one-third of this high.

Bitcoin is one of the more than 1,900 digital tokens listed on CoinMarketCap. Some of the top-valued tokens come with names like Dogecoin, 0x, Komodo and FunFair.

Many of the cryptocurrencies are owned by a few dominant players or "whales".

According to Chainalysis, a blockchain research company, 1,600 people own one-third of the bitcoin market (or about US$40 billion at current prices). Each has at least 1,000 bitcoins. There are now 100 wallet owners each with 10,000 to 100,000 bitcoins.

Price movements could be controlled by the whales through "pump and dump" schemes where cryptocurrencies are inflated using misleading information and sold at high prices to unwary investors.

Cryptocurrencies are usually generated through initial coin offerings (ICOs) which raise funds for entities, usually start-ups. This is much like crowdfunding.

Many have heard of investors making money through ICOs. But the reality is that the bulk of ICOs is dubious.

A July study by ICO advisory firm Satis Group, based in New York and San Francisco, revealed that 78 per cent of ICOs last year were "identified scams". Similarly, a report in June by Big Four accounting firm PwC said that among the 3,470 ICOs announced, only 1,158 or just one-third closed the funding round successfully.

CAVEAT IS CONSTANT

Regulations are progressing in countries to keep pace with the changing cryptocurrency world. The key priority is to protect investors, even if they are supposedly the savvy millennials.

In Singapore, the MAS taps the existing financial legislation to provide order in the growing sector of digital token offerings. Intermediaries are subject to restrictions on anti-money laundering and countering the financing of terrorism. There are also advisories and alerts which investors should refer to.

However, many cryptocurrency dealings are outside Singapore and do not come under local regulations.

In the investment space now, an emerging form of savviness is thus required.

Fostering awareness is key. In the education sector, NUS Business School is integrating blockchain components into its student curriculum. Even the learning process is strengthened, such as through the recent Bank of China-sponsored case competition, which saw participants from 12 countries developing strategies to help the bank adopt future e-payment methods.

However, it is not just in the esoteric products or the novel platforms. It is in the caveat - the understanding of downsides beyond the upsides. This is pertinent whether it is fintech or traditional time.

• The writer is associate professor and director of Centre for Governance, Institutions and Organisations at NUS Business School.