All in fintech
Legacy institutions and brokerage firms no longer have dominant control over the wealth management sector due to the disruptive forces of FinTechs who cater to all customer segments with similar offerings at a fraction (or no) cost. These companies are allowing individuals to start building wealth now at a young age through multiple financial options.
APIs are responsible for fueling the enormous value and cutting-edge changes in technology, most notably driving FinTech’s robust progress across multiple areas in financial services.
Forbes FinTech50 showcases the 50 most impactful companies in the FinTech industry (for the US) when it comes to innovation and growth, across multiple sectors such as real estate, lending, payments, blockchain, and personal finance. Half of the list belongs to firms operating out of the San Francisco Bay Area.
An emerging area that is growing heavy support from customer demand for change is real estate, specifically in solving the critical issue of homeownership. Plagued by slow, inefficient, and restrictive processes from lending institutions, users are looking for solutions to solve this major financial need.
Industry growth in FinTech has been attributed to a handful of maturing companies — but has now dramatically spread to a larger pool of firms (including startups) that have reached the level of unicorns, more than any other business sector worldwide.
As 2018 comes to a close, what industry-wide trends can we look forward to in 2019 on the FinTech front?
The FinTech100 is an extensive annual report created by KPMG and H2 Ventures, showcasing the industry trends and innovative global companies in FinTech that are driving the most disruption through technology. The 2018 FinTech100 was released earlier this month and marks the fifth edition of the report (going back to 2013), which continues to discuss indicators of change, and potential strategic opportunities for growth.
There was no standard infrastructure that allowed a customer to securely authorize viewing of bank account information in real-time — until the launch of Plaid, a fintech that has become the industry’s “super-connector” by creating a secure portal and process to exchange financial information back and forth between customer, applications, and banks.
Numerous trends and technologies are intersecting now that will take payments past a future state of a cashless and paperless transactions, to a completely open, digital world marketplace.
As an emerging technology seeking mainstream acceptance, blockchain continues to build applications and use cases towards solutions that can have an immediate impact on industries in need of innovation, efficiency, and/or disruption. One industry that easily fits these criteria is insurance.
Fintech continues to evolve as customers now trust these digital-only companies more than ever, slowly migrating deposit balances and other assets away from banks and traditional institutions. If you're an individual interested in investing, working for, or building the next great fintech, here are four areas to examine closely:
Western Union and Moneygram are widely known names in the payments sector of finance. As technology rapidly disrupted financial services over the last 20 years, FinTech (financial technology) companies have emerged globally to provide a simple, low-cost alternative to well-established agencies.
Despite the increasing levels of awareness with this new technology, industry insiders still have difficulty explaining to the general public what blockchain is and what potential it has, making it difficult to build belief for the masses.
Large financial institutions are full of legacy systems and mounds of regulatory risk, making it difficult to implement blockchain, an emerging technology with multiple benefits capable of enhancing industries and companies that heavily rely on transactions and record keeping.
