The term “Fintech” is the union of the words “Financial” and “Technology.” It is used to refer to companies that offer financial products and services using technology as the central axis of customer service. It provides a more accessible, faster, and more comfortable service than traditional financing options.
Some aspects that characterize Fintech sector companies are the following:
- They offer an innovative product that solves a specific problem and that without a technological component could not be solved.
- The contracting of the financial service is done digitally; that is to say, it is unnecessary to contract it at a branch or sign any document.
- The platform or website has most of its processes automated, so it can offer higher returns than investment options contracted and traditionally operated since their costs are lower.
In the United States, Fintech companies are mostly located in San Francisco and now in San Jose. We are developing most modern fintech solutions using the latest tech stacks and military-grade security. Our key focus is to use your investment to turn huge profits for you in every corner of the country. We have our regional offices in all of the USA’s big cities, including New York and Miami. You can always hire our app developer in San Francisco, not only the best in the USA but the whole world.
Types of Fintech Startups
The technical advance of the industry has been aimed at improving existing banking processes, but new specialized micro sectors have also emerged.
These are the types of fintech sectors that exist in the market:
The digitization of the industry has enabled large banks to launch their online banking versions, but 100% of digital banks have emerged. ING was among the first, but the emerging competition, such as N26 or Revolut, is going strong.
In addition to the modernization of traditional banks, online payment companies have also appeared to have significantly facilitated the management of e-commerce and any online business. Thanks to Paypal or Stripe, among other platforms, you can collect and pay without waiting for your entity to put you a virtual POS.
Another type of company to mention are those that help control and organize personal expenses. The first step of financial education is to have control over the money that goes in and out of your pocket, and apps like Fintonic, Arbor, Spender, Monefy, or Mint simplify the task.
Investment in Fintech Sector
Financial consulting has been for many years a sector that seemed to lag in technologies or at least its application in daily management. Active portfolio management, entrusted to experts who relied on a mix of data and intuition, is giving way to automated control based on big data with those known as Robo advisors.
If you know how crowdfunding works, it will not be difficult for you to understand how companies like LuFax, Zopa, or WeLab bill millions of dollars with a business based on loans between individuals on an online platform. The so-called peer-to-peer-lending or crowdlending consists of people who lend money to other people without intermediation from banks or finance companies. Who connects lenders or investors and borrowers are these trends of Fintech Investment specialized in loans. There are even specialized companies in crowdlending.
This term arises from the merger of insurance and technology, which includes companies, traditional or not, that take advantage of technology innovation by applying it in the insurance sector. Fraud detection, contingency estimation, or customer information management are some of the points where technologies such as big data are changing workflows in insurance companies. Hire most experienced app developers to get the best out of insurance opportunities.
Proptech and Retech
Nor is the real estate sector alien to unstoppable technological development. Hence the almost similar concepts of PropTech (Property Technology) and ReTech (Real Estate Technology) arise. Visits in virtual reality, home automation, and big data is providing immense possibilities. The possible applications of the latest technologies to the real estate sector are numerous.
Even, in a mixture of investment and retech, companies like the Spanish Housers appear, specialized in real estate crowdfunding. In these types of investments in the fintech sector, we have not included startups dedicated to cryptocurrencies because we would need another full article. Still, there are many, and they intend to revolutionize the way money works.
Invest In The Fintech Sector With Crowdfunding
We observe a rapid evolution of the needs of individuals and businesses regarding the use of financial services. Indeed, the globalization of exchanges, the digitalization of communications and new technologies open the door to many new entrants.
These allow them to manage a large number of flows with a more limited infrastructure than traditional players. They can thus achieve economies of scale and develop more agile, economic and quickly replicable offers internationally.
The size and the regulatory constraints prevent them from being as reactive as Fintech companies: capital requirements, compliance with MIFID I, II and III systems, or even the Basel agreements. Besides, the financial sector is concentrated mainly around these large companies which prefer to be careful in setting up new offers.
They also face a drop in the level of attractiveness in terms of recruitment. While in the 1990s and 2000s, financial institutions were the target of most young talents, today they are more attracted to the entrepreneurial adventure and, therefore Fintech Investors are finding the fintech sector as the most progressive as it pays them huge revenue and ultimately plays a vital role in success and prosperity.
The Trend of Fintech Investment is Not Only Competition
There are several ways that the traditional financial industry can leverage the entrepreneurial ecosystem and collaborate to create solutions or products more quickly and efficiently.
Given the speed of technological development, it seems logical that the traditional industry cannot afford to ignore the Trend of Fintech Investment. 32% have a joint partnership with a Fintech company, 22% buy and sell their services, 15% have incubation programs for Fintech companies, 14% sell services of these companies under their brand, 14% have formed funds to invest in Fintech, 9% of Traditional companies acquire Fintech companies. Still, 25% do not have any relationship with Fintech companies.
It is a fact that the digital revolution is transforming the way people access financial products and services, and it will be vitally important for every financier to be aware of the main innovations, trends, and players. We at Zazz are providing some fantastic digital solutions catering to Fintech to the next level. Our solutions are up to date and most secure in the market.
Also Read:- The Benefits of Fintech for your Company
If you have any queries or want to know our method to develop Fintech in detail, contact us. Our experts are always available and happy to help companies transform digitally.