18 Jan 2018
7 extremely promising fintech fields to explore in 2018
Fintech is without a doubt one of the most exciting (and profitable) places to be in the world of new technologies. Hundreds of innovative products are being released every year to make it easier to pay, lend, save, secure, invest or manage money for both individual and business clients. Many of those products gain trust of millions of people and investors. But the most exciting fact is that it’s just a beginning.
When it comes to dealing with money, we are at a crossroads. Sure, the fintech industry is already really, really big. According to data by PitchBook, global venture investment in this field reached $17.4 billion in 2016, while the number digital banking users (essentially, a B2C target market for fintech solutions) is well beyond one billion. But it’s almost nothing compared to what is to come.
In just a few years, the digital banking industry will double in size and continue to grow at a staggering rate. Many of today’s innovative solutions will become common utilities. All that considered, it’s hardly surprising that investors are betting their money on fintech solutions. After all, where else would the money be?
So – what areas of the fintech industry will be the most attractive for both entrepreneurs and investors in the upcoming year? We have compiled a list of seven you should definitely keep tabs on.
1. Everyone (and everyone’s dog) is going mobile
Mobile payments may be one of the most obvious and mainstream areas of fintech. But it isn’t anywhere near reaching maturity. According to Statista, the mobile payment volume will increase tenfold (sic!) between 2016 and 2021, reaching about $275 billion. That’s an insane growth rate that is also a direct call for more fintech solutions in this field. For startups interested in cooperating with large financial institutions, it’s worth it to know that more than half of them list mobile as a technological area that they plan to invest in “within the next 12 months”.
Developments in this area are also spurred by other tech fields. For example, biometrics makes it easier to quickly and safely authorize mobile transactions as well as remote interactions with banking institutions, giving birth to solutions such as Aadhaar.
2. When it comes personal finances and wealth, it’s all about data
There is one area of interest for financial decision makers that tops even mobile – it’s data analytics – the engine behind a large number of innovative fintech solutions. Personal finances and wealth management combined make an extremely fertile ground for applying data-based ideas.
Even in a country as rich and developed as the U.S., almost 7 in 10 adults have less than $1000 in savings. At the same time, there is a sizable and growing number of people interested in investing their money in non-traditional ways (consider the popularity of various crowdfunding platforms). To leverage this potential, data-based solutions such as the comparison platform CompareAsiaGroup emerge. Solutions such as FriendlyScore help individuals and corporations determine users’ credit score based on their social media data.
3. And so is the case with insurance technologies – the rise of insuretech
In the past few years, the potential of fintech solutions in the insurance industry has become pretty obvious. It is thanks to solutions such as Metromile, which tracks your mileage in order to calculate pay-per-mile car insurance rate, saving their users considerable money compared to traditional car insurances. We can expect more of such innovative insuretech solutions in 2018.
4. Blockchain is bigger than Bitcoin
With $10000 a coin worth, Bitcoin is right now one of the hottest topics on the news. But blockchain, the technology behind the cryptocurrency, is much bigger than Bitcoin, or even the very concept of cryptocurrencies. Not only does the blockchain technology pave way for more peer-to-peer type of fintech solutions, but also makes transactions safer and faster. Today, even the biggest banks are implementing blockchain-based technologies, working in tandem with fintech startups.
5. Money will drive social interactions (more than ever before)
Whether we like it or not, money has been the centerpiece of social interactions for millennials. With the advent of solutions such as Tilt, it may overtake social media as well. Despite the ultimate failure of Tilt, the concept of combing “social” with “money” itself is very much alive and will continue to bear fruit in 2018. One way for innovative founders to do it is to provide valuable services to existing social media networks, facilitating functionalities such as gathering actionable investment data based on social media activity, fast payments and more.
6. Biometrics – the inevitable answer
Whatever area of fintech you may be interested in, biometrics is a field you should absolutely consider not only as an enhancement of other technologies, but as a gigantic and growing fintech field in its own rights. It is one of the most eagerly adapted new technologies for the purpose of user authentication by banks as well as innovative fintech startups. LiveBank is an innovative solution, which gives banks the ability to offer all the advantages of the brick and mortar banking branch through a digital self-service channel. It provides a video-based virtual branch, which uses biometric identifiers to authenticate clients. As a result, banks can offer their customers digital onboarding (eKYC), making it possible for them to take advantage of even the most complex banking services without ever having to set their foot inside a physical branch.
7. Data, data everywhere – the unstoppable march of regtech
Historically, regulations have been one of the biggest barriers to entry for financial services and organizations. Today, the continuous need to deal with them as well as huge amounts of data it entails gave birth to regtech – a fintech field in its own right. Regtech companies provide financial institutions, which offen struggle to be nimble due to their size and legacy systems, with ways to handle different types of regulations and compliance processes more easily. As the number of regulations increases, with the advent of new personal data protection laws and cyber security threats, it is no surprise that this field grows at the rate of almost 50% each year, earning well over $1 billion in investment. The year 2018 will be another one when we will see exciting new developments in regtech.
Software Mind is a Polish software company that has been working with innovative companies and startups from various fields for several years now. Dedicated to the highest quality of coding and cooperation in outsourcing projects, we worked with various fintech companies.
Transforming the way we think about money is fascinating. If you also want to do this and have an interesting idea of your own, contact us now and let’s talk about it.