Four trends shaping FinTech development

FinTech is growing exponentially due to the expanding diversity of technologies available and the number of consumers and businesses looking to utilise them. FinTech corporate finance is flowing to a number of lucrative channels, which could eventually become the norm for daily financial transactions. One of the main factors behind the rapid rise and dynamic future of FinTech is the still early phase for ideas: start-ups are able to generate innovations that traditional finance can integrate across multiple platforms. Certainly, business transfer agents are seeing a wealth of opportunity in finding acquirers for specific segment trends. Here are four trends that are playing a major role in the growth of FinTech.

Mobile finance

Manual personal financial management systems such as balancing checkbooks and utilising unnecessarily complex hand-written tables are almost obsolete, with web-based alternatives providing efficiency and convenience. For example, Intuit’s accounting software Quickbooks and budgeting program Mint offer semi-automated, user-friendly and web-native experiences. However, most consumers only check these occasionally due to their desktop-based nature. As a result, mobile-based applications tht started life on a wireless platform to begin with, such as Level Money, Guava and Moven, are offering the next generation of financial tools. The mobile is becoming key in any consumer-focused FinTech product.

Digital payments

While Bitcoin had long been somewhat of a joke among serious investors, the cryptocurrency has spawned a generation of interesting start-ups and digital-payment innovations. Venture capitalists are beginning to see the long-term potential, while traditional bankers are gradually considering adapting their methodologies to a new digital payment world. Coinbase, a Bitcoin payment processor, has already raised around $30 million from venture capital firms such as Andreessen Horowitz and Union Square Ventures. Mobile Bitcoin wallet Blossom is attracting interest from a variety of investors due to the development of several innovative payment systems, such as charging Bitcoin purchases to mobile phone bills.

Fast consumer loans

Following the dry spell of available loans for consumers and small businesses on the back of the global economic downturn of 2008-2009, the FinTech market stepped in and notched vital gains ahead of traditional finance. New online lenders such as Kabbage and OnDeck have taken advantage of offering consumers and businesses fast access to credit, while a number of peer-to-peer lending platforms are utilising the desire for consumers to turn into loan providers to reap profits.

Small data for financing

In contrast to the massive hype of the Big Data community, a number of FinTech firms are making rapid gains in the development of small data platforms. This is data that can offer a small niche service based on limited information but provide major results. For example, the Entrepreneurial Finance Lab has created a psychometric exam to help financial institutions assess the creditworthiness of entrepreneurs in emerging markets, where little to no credit information currently exists. The Lab is already actively testing potential clients across emerging regions to help microfinance institutions make better decisions.

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