“You have to, to serve these markets, re-imagine how money can be managed and moved because there’s going to be more change in the next five years in financial services than happened in the past 30.”

– Dan Schulman, CEO PayPal

Thus, there is absolutely no denying the fact that technologies will continue to invade the age-old financial industry. Riding on the fintech bandwagon, many millennials and innovators have reinvented their businesses and made a hefty profit in the transition.
But, how do you even start?
With tons of startups entering the market every month and billion-dollar giants running the show, it can be quite hard to get your piece of the pie.

The 5 Best Fintech Startups and Their Recipe for Success

What’s better than to learn from those who have already made it big, so before delving into the recipe for success, let’s first look at some trendsetters in the current fintech setting, and what has been their secret ingredient.

1. Stripe

• X-Factor:
  • Ease of Integration
  • Tools
  • Competitive and Crystal Clear Pricing
  • Customized
  • Better Customer Support
• Niche: Online Payment Services
• Funding:
  • Raised a total of $685M in 9 rounds.
  • Now valued at $20B.

Stripe’s impeccable functionality and meticulously designed API has helped create the best possible product for the consumers. It has undoubtedly become a one-stop destination for the creation of subscription services, crowd-funding platforms, an e-commerce store and more. This tech company has been able to build an economic infrastructure for the internet by helping out businesses of almost every size. It combines a payment platform with applications that put revenue data at the heart of business operations.

2. Robinhood

• X-Factor:
  • Laser focus on target market (millennials)
  • Viral marketing strategies
  • Clutter-free interface
• Niche: Trading and Investments
• Funding:
  • Raised a total of $539M in 5 Rounds
  • Now valued at $5.6B

It could easily be touted as the top fintech company of this year. In order to keep the fees down, the company abstains from opening storefronts and renders no additional tools. Aptly named after the popular fictional character, it is helping the less economically privileged grow by using and betting on rich people’s money. The fintech app has eliminated all brokerage fees that have traditionally been associated with initiating a buy or sell. It earns money through its Robinhood Gold accounts for premium members and by collecting interest from cash holdings and stocks just like a bank. The app is clutter-free and straight-forward, making it easy to use for everyone.

3. Lu.com/Lufax 

• X-Factor:
  • Broad product offering
  • Diverse liquidity avenues
• Niche: Peer-to-Peer Lending and Financing platform
• Funding:
  • Raised $1.7B in 2 rounds of funding
  • Now valued at approx. $10B

Lufax has grown to become China’s largest fintech company in less than four years. It is considered to be China’s most innovative non-SOE financial institution. The number of registered users on Lufax surpassed 14 Million recently. Lufax takes complete advantage of the latest big data and IT offerings, and clouts the most advanced risk assessment models and risk control systems.

4. Paytm

• X-Factor: 
  • Extremely high brand awareness
  • Strong marketing campaigns
  • Word of mouth
  • Strong investments from big-wigs
• Niche: Online payments
• Funding:
  • Raised over $2.2B in 4 funding rounds.
  • Now valued at approx. $15B.

Touted as India’s largest mobile commerce platform – it has 80 Million active monthly users and processes around 5 million transactions every day. Paytm tries to maintain an open culture where everyone is a hands-on contributor and feels comfortable sharing ideas and opinions. Paytm’s team spends hours designing each new feature and obsesses about the smallest of details.
Paytm’s approach is quite simple – To design something they’d use.

5. Klarna

• X-Factor: Business Model
• Niche: Online Payments
• Funding:
  • Raised $681.7M in 13 funding rounds
  • Now valued at north of $2.5B

According to its CEO, Klarna’s mission remains the same, even after 12 years of its formation – To make paying as simple, safe and above all, as smooth as possible.
This simple vision has helped Klarna become one of the largest banks of Europe.
Klarna’s pay later policy has proven to be a tremendous success across Europe. Try it first, pay later, lets users pay 14 or 30 days after delivery depending on the store. Besides, there is also an option of paying in installments for its users.
They have a user base of almost 60 Million and has some 90,000 registered merchants on their platform.

So, what is it specifically that differentiates these exceptional startups from the rest of the crowd?

You might have observed that some of the words used to describe all of the listed products were – “simple” or “easy.” This can’t just be a coincidence.
Simplicity and ease-of-use are powerful differentiators that can separate any product from their competitors. The simplicity of these products gave them a competitive advantage over other established giants.
Mentioned below are the 7 steps you need to consider in order to establish a successful Financial Technology startup.

STEP 1: Identify your Niche

Fintech is a broad term and has a lot of dimensions to it. The classification of Fintech really depends on various circumstances.
It may refer to a specific set of start-ups and companies, or it may apply to initiatives enabled by technological innovations that contribute to the development of the financial segment.
There are many domains in fintech to consider, here are some of them:

• Fund Movement, or transactions by giving or receiving payments.
  • Currency
  • Payment Solution
  • Remittances
• Fund Placement, or the financing of planned or unplanned financial regulations.
  • Saving
  • Investing
  • Borrowing
  • Alternative Financing
    
• Data Management, to get insights for improving decision making
  • Financial Management Tools
  • Research and Data

For starting a fintech company, one must be crystal clear of the target market and the problem they are looking to address. Besides choosing a domain, your product should cater to a specific audience, e.g., a country, a state, a city or a particular demographic. However, it is always better to launch your startup locally first and expand to the global market later if needed.

STEP 2: Know the Regulations

The banking and finance industries are highly regulated ones’ and for obvious reasons. The regulations are why financial service industries can be tough to break into. Several laws have been put to place to ensure that these sectors are protected from frauds. Also, these regulations can immensely vary depending on the country, state or region you want to operate in.
The arrival of Fintech has ushered in new ways of handling and making money, and thus, have created a grey area for regulations. This has been drawing the attention of lawmakers. 
So, whatever domain one wishes to venture in, it is of vital importance to thoroughly understand the regulatory measures that apply according to the demographics and geography.

STEP 3: Discover your Edge

Every unique product or innovation that has been able to disrupt a sector successfully has always been the one that has done something differently.

There couldn’t be a better example for this scenario than Robinhood. With their unique business strategy and viral marketing campaigns, they were able to successfully disrupt the trading and investments domain. Their distinctive business offering, like charging zero commission proved to be an instant hit amongst millennials with limited pocket.
The fintech industry is getting crowded. Many innovations are already underway. Still, a critical entrepreneurial question to ask is if your product/venture will be able to offer something unique and of high importance.
The danger for startups is to become a “me too.” If there is already an entity that is established and doing well in your niche, then you should divert your focus to something new and innovative.
Thus, it is vital for new-age fintech startups to focus their attention towards developing a product that offers a service or a feature that is exclusive to them. There needs to be some sort of nuance that your solution must provide.
This distinction would serve as the disruption that you might have been looking for.

STEP 4: Hire the Right Talent along with the Right Tech Stack

• Hiring the right talent
A successful enterprise is made from its people. Therefore, hiring crème-de la-crème from amongst the crowd is of vital importance. If your city has a limited talent pool, then attracting good talent becomes quite tricky.  
In such cases, the best decision for a startup would be to hire a software development team offshore (consider India!). This not only cuts significant costs for up-and-coming startups, but also provides a solid team of specialists with specific domain knowledge and relevant experience.
If you are on the lookout for creating a great product and are considering hiring a software development company, then look no further, we have compiled a list of the best financial app development companies.
• Choosing the right tech stack
It is must for every fintech product to have a customized software. No decent startup relies on third-party CMSs or frameworks to handle their transactions. Additionally, no ready-made solution can match the performance capabilities of a custom designed software.

With finance, comes along the risk of data breach. Therefore, data safety is one of the most critical aspects of Fintech App Development.
Every startup needs to ensure that their product is secure and all the sensitive data is encrypted and stored in the cloud.
Recommended Read: How Much does Mobile App Development Cost?

Step 5: Start by creating an MVP (Minimum Viable Product)

I strongly recommend starting with a Minimum Viable Product first.
For beginners, an MVP is a development technique in which a new product or website is developed with just enough features to suffice for the early users of the product. The final product, with all the elements, is only designed and developed once the feedback is received from the initial users.

There are numerous advantages of following this process, primarily:
1. Cheaper: An MVP saves you a considerable amount of investment because you’re not required to develop extra functionalities that may have compromised the product anyway. These cost saving are essential because you don’t know for sure whether the consumers will like the product. Through MVP you can test the waters and then dive into the deeper end of the pool.
2. Effective: Using the MVP approach means you end up with only those features that you require the most, so, there is comparatively less façade, and your product turns out cleaner and simpler.
3. Faster: Another benefit of an MVP is the Speed of Development. You’re not trying to create a perfect product right away; it serves as a platform to implement the idea, study its use, make amends and then proceed further. This makes the entire process a whole lot faster and easier.
4. Reduces risk: A startup with a Minimum Viable Product is more likely to receive funding from the investors, this is because an MVP gives you an opportunity to test the waters without directly building the final product. It allows developers to test the viability of your product amongst the target audience without requiring huge investments.
The lower the risk of the investment not paying off, the more likely investors are to fund your idea.

Step 6: Get Funded

Starting a fintech company is a costly affair. Making an incredible product requires talent, and talent isn’t cheap. As traditional organizations are trying to acquire fintech talent for themselves, startups would inevitably face competition in hiring. If your venture isn’t looking to partner with professionals who can create the entire product range, then stay prepared to shell out a reasonable amount for talent.
Now, if you don’t have deep pockets, it becomes quite difficult to stay afloat in this volatile domain. Thus getting an investor onboard becomes essential to not compromise on the product quality.
What entices Investors?
With the current wave of excitement around fintech. The global venture capital investments have crossed almost $17B. This, however, could also be a bane for early age startups, because the competition for funding is snowballing exponentially. VCs are getting more and more selective, and are seeking out companies with truly game-changing offerings.  
Thus, it is required to make your value proposition more and more enticing.

Step 7: Build Partnerships

It is as essential for up-and-coming fintech startups to develop alliances with relevant institutions, as is getting funded.

Partnering is an excellent approach to build muscle in innovation and transformation. In which you can learn at minimal cost and minimum risk. The primary reason for partnering pertaining to this specific domain is, ‘Credibility.’
It could be hard for users to trust an emerging entity, and that too in such a volatile domain. Thus, when you are associated with a relevant name, it becomes comparatively easier to sail through those hurdles. Financial institutions also bring along a large customer base and comprehensive customer data.
Thus partnering can provide a considerable boost to startups and together they could improve product efficiency and build highly accessible products.

Wrapping Up

Fintech may not be the easiest industry to target. With all the pitfalls in consideration – It takes sweat, time and effort to create a successful fintech company. It demands expertise, creativity, and honestly, a lot of grit to launch a startup in such a frivolous and competitive domain.
There are numerous opinions highlighting the supposed discord between the slow-evolving realm of finance and the highly disrupting world of technology. The pressure on tech companies to deliver huge results rapidly is immense.
Still, if you believe that you will be able to solve financial issues for your users through innovative means, go ahead. You will also need the right people by your side. A team with strong technical skills and impeccable domain expertise will definitely help in building something great.

Just be shrewd with how you do it.

After all,
Fortune favors the bold.

From helping organizations like BankOpen to dozens of startups worldwide, we at EngineerBabu have a track record of building highly successful fintech products.
And several have even gotten funded!
That’s precisely why we understand the ins’ and outs’ of this realm and how to scale a business to tremendous heights.
So, If you are on the lookout for solid domain expertise and a trusted name in the industry, contact us right away.

Recommended Read:

• FinTech in 2019. Trends to watch out for the next big year!
• Digital Transformation in Finance

The post How to Start a FinTech Company – 7 Things You Should Know appeared first on EngineerBabu Blog.

Many find them similar but Digitization is the process of storing, converting, processing or transferring information in a format recognized by computers.
Whereas, Digitalization is the change in social, business and economic behavior on the adoption of new technology.
The essence of digitalization is the way consumers, businesses and the government adopt & incorporate technology to collaborate with systems, processes, people and the entire business community.

One of the best examples of digitalization is the Apple watch.

The Apple Watch is a perfect specimen to understand digitalization, it shows how a normal watch can be transformed into a watch with a phone, messaging and internet capabilities.
Another good example is the mobile numbers linked with Aadhar Card (Unique Identification Number for residents of India) which in turn is coupled with the financial account of consumers.
However, it is not only technology but the changing corporate scenario, business processes, and operating culture, that drives digital transformation to success.

The financial projects eyeing digital transformation are long-term, massive in scope and comes with risks too. Though many consider digital transformation a hype or the confusion, it does involve a sincere & serious change in business spectrum. Since the time digital transformation entered the finance domain, there have been many surveys and research to understand the importance or impact of the same. Digital transformation technology calls for an investment in hardware, software and sometimes even in products or services.
Gartner survey with financial executives from huge corporate establishments revealed that 62% feel digital transformation is a management initiative while remaining consider it as a part of optimization. Also, many companies are keen on investing in technology that can speed-up their businesses. In fact, companies opt for investing in digital transformation to differentiate from their competitors.

Impact of Digital Transformation on Finance

Digital disruption has heavily impacted a variety of habits and behaviors of the professional world. Technology combined with smartphones and the internet provides numerous benefits to the customers as well as to financial establishments. Previously the implications of digital transformation were unknown as people were concerned about the transition from manual to the digital world. However, the scenario has changed now. With tighter regulations and changing customer demands, the financial applications and systems have become nimbler and progressive.

For financial establishments, digitalization is more than just adopting technologies such as cloud, big data, social media or mobile. It is aimed more towards creating new business models to develop an eco-system where all markets & consumers could participate.
Thus, organizations focus more on capitalizing with new and emerging technologies that help them in positioning and transforming the teams into high performers.
Digital transformation enables digital tools to enhance productivity & efficiency and change of hard paper documents to secured PDF or HTML formats. The days with an application form and product sheets are gone. The sales team & field officers are now empowered with smartphones and other portable devices where information can easily be displayed. Many financial services providers have embraced digital transformation. However, many companies have taken hold up approach of observing the developments and then decide on investing in digitization.
Digital transformation comes with its share of risks, and hence a setback approach is a safer route.
Digitalization has positively impacted the economic growth and has accelerated the growth of innovations. Many are on for a debate that there is no economic growth, but the signs of potential positive impact are quite visible; the best examples are the mobile banking apps, mobile money, and e-wallets.

Enlisted here is the importance of digital transformation on financial sector:
1. High Standardization: Finance functions are always considered as high performing. When these are integrated with technology systems with standardized processes and data; leads to a high standardization.

2. Highly Automated functions: Adoption of new technology tools lead to higher process automation for services such as money remittance, procurement orders, invoice generation, and KYC verification.

3. Faster Performance: With the adoption of big-data and other machine learning tools in finance, it is easier to predict and forecast budget allowing teams to finish month-end cycles before time.

4. Insight-driven functions: Digitalization has modified financial models in such a way that the resources concentrate more on deriving insights rather than focusing only on transactions.
5. Improved customer and employee experience: The same level of information is available with customers and employees and thus less chaos in transactions.6. Better Service Delivery: The legacy systems integrated with new technologies have changed the finance’s operating model. The structured processes have improved service delivery.
Along with the high importance, the major priorities & challenges for financial services and banking establishments over the world that would impact their business includes strategies listed below:

1. Acting in line with the regulatory requirements
2. Reduced costs or improved margins for retail business operations
3. Improved customer segmentation
4. Enhancements in services, product designs, and promotional channels
5. Migration from physical or legacy channels to a digital platform
6. Integrating the legacy systems with new technology following all compliance and guidelines

Financial organizations now implement these strategies and they can digitally transform and automate their processes. The impact is such that there has been a drastic improvement in performing customer operations in a lesser time-frame. The automation has lead financial companies to meet regulatory deadlines, achieve operational and transactional risks and still stay competitive by investing in technology.
Digital transformation has assisted in automating monotonous tasks, management of compliance and accounting & operations functions which include accounts, reports & analysis. Digitalization also reduces the possibility of cyber risks and minimize errors that occur due to the execution of robust strategies.

Critics response to Digital Transformation

Despite the positive impact of digital transformation, critics believe this is a wonderful opportunity for tech vendors to restyle their services & products and sell them in the name of digital transformation.
Well, another critical point to note here is that none of the tech guys spend their working hours digitally transforming or innovating, but instead spend time in programming, coding, and development. However, critics do not realize that this coding, programming, and development is what makes a system perform in a particular manner. The technology drives these systems and hence the transformation.

Why digital transformation matters in finance?

Digital transformation may only seem to be a buzzword, but as they say, there is more to an iceberg than appears on the surface, there is definitely more to our story of digital transformation as well.
The concept of digitalization assists financial service executives in altering the already set rules, and the economic growth is quite visible. The customer-facing mobile apps are the best examples. The increasing number of people relying on the mobile and online banking applications, the financial and banking services are on a race towards digital transformation. The more convenient an application is for customers, the more is the digital transaction and financial growth.
For banks and credit card companies, providing a mobile customer experience with no downtime and faster transaction process is of higher importance. The other financial establishments such as capital markets, funds, and equity market utilize big data and automation tools for data analysis and high-performance computing to track milliseconds of transaction data.

A closer look at both the examples reveals that the business is capitalizing on technology to improve customer experience.
The primary aim of digital transformation in the financial sector is to be more customer-centric.
In financial services, competition is not just with other financial services providers but with anyone offering a real technology and consumer experience. The focus while digitizing financial services or while developing financial mobile applications should be to make the customer’s lives easier. Here, it is essential to make a point that digital transformation is not a technology strategy but a business strategy that makes business swift and quick to respond to the market.
Digitalization has unlocked newer opportunities in the banking, credit and capital market functions of the financial domain. There are multiple branch locations, and it is hard to keep a branch right next to the consumer; hence mobile apps that keep your office straight in your hands. Having said this, many financial institutions still rely on their legacy systems that run on IBM frames and are built on COBOL.
These systems, however, cannot be upgraded or updated as the developers too have moved to the newer technologies. It is a considerable challenge for some financial services companies to pull out the data and get on to the modern technology-based system. Other than the integration of the legacy system with advanced technology, the keenness to embrace digitalization by company workforce was also a challenge. But with the disruption in existing services and products, it is essential for companies to focus on acquiring new skills and technology.
The key to surviving in a digital environment is to adapt and adjust to the changes. CIOs take this responsibility to adopt the changes and lead the transformation. Though the right technology will outgrowth the efficiency, it is the workforce that ensures successful implementation.

Digital tools meant to support financial functions

The digital tools meant for financial services industry focus more on improving and updating the existing competencies and core systems. There are other exponential tools too that are intended to deliver new capabilities.
The growing technologies disrupting the financial system includes:
Cloud
The benefit of adopting cloud in finance is unquestionable. Cloud brings further acceleration and swiftness. Cloud technology in financial services expedites new digital workflows enabling effective interdepartmental collaboration or collaboration between business and third parties. The financial institutions use SaaS-Based cloud applications for business processes such as HR and accounting. As the workforce and the team heads get comfortable with the application, it gets integrated with the core systems.Financial services/solutions find security & compliance as crucial problems.

However, with cloud-enabled applications, it is easy to scale data for critical functions such as credit scoring, consumer payments, statements and billings for essential account functions. Also, data speed is vital for financial firms to stay competitive and in effect. Financial services industry is the primary target for cyber criminals, owing to sensitive personal information. The quickness of cloud safeguards the critical data, digital financial assets, and user information while protecting the employee performance.
Robotic Process Automation
One of the hottest entry in the financial services vertical is the robotic process automation. Financial establishments work on multiple technology systems and process robotics assist in automating transaction processing and communication across various systems.

Process robotics address the key challenges of the financial sector and can be effectively utilized for:

• Billing and collections operations & accounts receivable functions
• Journal entry, allocations & adjustments, inter-company transactions
• Reporting-financial as well as external
• Budgeting, Planning & Forecasting
• Treasury processes

Process robotics will enhance the functionalities of legacy systems by lessening inefficiency and addressing the manual intensive activities. Although Process Robotics is at a testing state at a few organizations but is working exceptionally well to support legacy systems.
Data Visualization
When it comes to communicating across multiple departments within the financial organization, data visualization is the key to attain insight. Business executives have an enormous amount of data but communicating in regards to same was an issue.

However, with data visualization, one can easily track and predict organizational performance. The financial sector is considered as the data hub. With data visualization, the analysts can explain complex data, trace intersections of information and present details based on this analysis that helps in forecasting organizational performance.
It is estimated that more than 65% of people are visual learners. Data visualization technique provides decision makers with detailed visual data illustrations so that they can understand the analytics through visuals and make informed decisions.
Data visualization can also help the financial sector in identifying new and additional trends for interactive features and more profound insights. In fact, data visualization is used by the financial leaders to track KPIs- financial and non-financial both. Also, these financial leaders improve team performance by correlating the KPI metrics and data analysis.
Advanced Analytics
Today, there are several different channels through which the customers interact with their financial services provider. Because of the multiple channels, there is a load of customer data being collected by financial organizations. This data can be effectively leveraged using Artificial Intelligence or advanced or predictive analytics to gain insight into consumer behavior. Advance/predictive analytics can assist financial establishments to optimize their processes thereby reducing costs.
Predictive Analytics
Predictive Analysis is best used in applications such as Fraud Detection. The dashboard of predictive analytics reports prompts and provides notification on anomalies in transaction data. Other than detecting the anomalies, the advanced analytics software can assist in collecting, cleaning and analyzing raw data. The analytics also assist in identifying customer trends by predicting marketing efforts and analyzing customer past and present online behavior using machine learning algorithms.
Advanced Analytics improves a variety of finance functions and assists financial leaders in achieving insights such as:

• Improving supply chains
• Revenue Forecasting
• Identifying the trouble spots
• Fraud detection

The combination of human judgment with automation and advanced analytics provides an ethical oversight to the business.
Cognitive Computing
Cognitive computing is yet another constant disruption in finance. It is the technology that makes use of natural language processing, machine learning, speech recognition, and computer vision to stimulate human thinking. For financial organizations, it is essential to collect, analyze and use data to improve decision making. 

Some of the basic elements of cognitive computing are:

• It enables financial organizations to obtain personalized information about the customers and use the same to notify about payments, bills, and other reminders. Cognitive computing also offers suggestions regarding exceeding customer payments and other intelligent automation services.
• The cognitive computing also ensures the creation of conversation interfaces for placing customer queries and responding to them. Chat-bots are the best example of AI-powered digital assistants, developed to respond to customer queries thereby improving consumer services and CRM.
• Robo-advisors too are a part of cognitive computing but are not AI-powered. The Robo-advisors use algorithms to read through data and come up with a suitable suggestion.
• Cognitive technology works similar to human thinking but is considered as key to security. Protection of financial data is vital; hence cognitive computing is the solution.
• With complex laws and regulations within the financial sector, poor knowledge of data policies can make finances a challenge for customers. With cognitive computing, real-time updates on rules and real-time implementation of the policies help in keeping policy documents updated and encourage good compliance.
• Cognitive computing has enabled real-time trading analysis and improved trading systems so that customers can be served faster and better.

Cognitive computing has been beneficial for both the company and customers. Apps enabled with algorithms, machine learning, digital advisors and improvement in cyber security have positively impacted customers to manage their finances.
In-memory Computing
With financial companies dealing an enormous amount of data, higher transaction volumes and increasing compliance; there arises a need to address real-time data analysis challenge. If it is finance, it has to be high performing, but with enormous data load, the efficiency can be at stake.
The massive amount of trading and accounting data calls for a robust infrastructure, with high speed of transactions and in real-time. In-memory computing platform addresses these challenges. The information is stored in the main random access memory of specialized servers. This means that it eliminates the delay while retrieving data from servers.
The 24-hour mobile banking pile up huge data and at the same time the regulations, exchange rates, interest rates, share prices, etc. are also required to be updated. The in-memory computing platform offer users with real-time information and calculation. It also provides information around commodity trading in real-time at an excellent speed for the users to experience a never before financial experience.
BlockchainOne of the most trending digital tool these days is Blockchain. With the advent of Blockchain technology, the financial services industry is considered to have entered into a new digital era. This new technology has changed the way we think about transactions and has revolutionized the economy. Blockchain technology stands out of all the technologies that have disrupted the finance vertical.
Blockchain powers decentralized digital currency also called as cryptocurrency.
Recommended Read: How is BlockChain Revolutionizing Finance  
In Blockchain technology, encrypted blocks of data are considered as currency and are shared during transactions. Blockchain technology makes use of advanced encryption techniques to verify currency and transaction. Blockchain technology ensures that only the authorized users who own the part of Blockchain can edit the data using the private key.
Smart Contract is one of the most attractive applications of Blockchain technology. It automates the execution of commercial agreements and transactions. As Blockchain technology entertain no middlemen, smart contracts are considered more secure than the traditional agreements that adds up cost for the middlemen. It is also believed that the Blockchain technology will assist in fraud reduction, enable one time KYC process, efficient & cost effective trading, and many more.
The technology may sound a promising one, but still many challenges need to be addressed to transform the finance and banking sector with Blockchain technology completely.

Concluding View

It is just a matter of time before we see the described technologies disrupting the financial sector. With consumers becoming smarter and more demanding,

It is essential for commercial establishments to undergo digital transformation to appeal, capture and maintain the attention of consumers.

The post Digital Transformation in Finance appeared first on EngineerBabu Blog.

As Mr. White used to say – “I am the one who knocks”.
This new explosion in IT is definitely the one that is knocking on every VCs and investors doorstep. This could be precisely said because the overall investment in Financial Technology has already surpassed the 2017 results in mid-year itself.
Let’s take a look at some of the major breakthroughs that occurred in FinTech this year,
• The acquisition of WorldPay
WorldPay (now WorldPay, Inc) was publicly listed payment processing platform which provided online services for accepting electronic transactions by a variety of methods such as credit card, bank based or direct transfer. It also offered a range of merchant services and operated in an extensive demographic (400,000 merchants in 146 countries) across the globe. It was acquired by Vantiv, a leading provider of payment processing services and related technology solutions for financial institutions. The $12.9 billion acquisition came as a significant step forward for the two giants.
WorldPay which competes with the likes of VeriFone, PayPal, Stripe and several others gained significant momentum after the acquisition.
• The Funding of Ant Financial
It didn’t come as a surprise to many when China’s Ant Financial raised about $14 billion in its last seed round. After all, it is backed by one of the biggest names in the industry (Alibaba Group Holding Ltd.).

The funding made Ant the world’s leading FinTech firm. The funding undeniably equipped them with enormous resources for expansion. The affiliate of Alibaba Group Holding Ltd. is alreadyChina’s biggest online payments service and even controls the world’s largest money market fund.
“Now, with the help of our partners, we are going to accelerate our strategy,” Ant’s CEO Eric Jing said in a statement to Bloomberg.

Recommended Read: Top 10 FinTech Companies Transforming Finance in USA

Analyzing the above developments we could accurately predict where FinTech is headed in 2020.
Let’s take a sneak peek,

Fintech Trends in 2020

1. RegTech is here to stay

Compliance, Complexity, Cost and Bureaucratic processes have always stifled the development of the finance industry. The long and tedious processes have proven to be a bane for the industry. This led to the reincarnation of a morbid industry that never saw a significant thrust since the spurt of the dot-com bubble. Consequently, we are seeing a lot of financial firms shifting to Regulatory Technology (RegTech) to bridge those gaps.
One must wonder- What exactly is RegTech??

It is essentially the use of technology across financial services functions to ease financial tasks such as regulatory compliance. It has a significant impact on financial services.
In simpler words, it is a technology that helps financial service firms get better at dealing with regulation. For instance, Know Your Customer (KYC). But the benefits of RegTech far exceeds than just KYC.
As the world is moving from big data to ‘smart data’, technologies such as artificial intelligence and machine learning are enabling companies to gain insights into regulatory practices, automate reporting, carry out a meaningful inspection of critical compliance risk areas and even potentially create an end-to-end view of compliance.
Companies are using RegTech to deal with the vast amount of data they are generating. More data handled the right way also means better information. Many VCs and investors have already started riding on the RegTech bandwagon, due to which there has been a significant increase in the investment across this lucrative sector.
There has been an investment of $1.37 billion in the first half of 2018 – more than for all of 2017. RegTech has a promising future ahead, and these new-age startups will be the ones to watch out for in the upcoming calendar.

1. Governance.io / governance.com:Based out of Luxembourg, and founded by brothers Bert and Rob Boerman, this RegTech startup provides smart technology and support services to facilitate the control of regulated companies. They raised their Series A round this year, Governance.io has established itself as a platform for good governance through the use of technology and support.
Deployed at-premise or in the cloud, the solution allows all stakeholders to collaborate on data, documentation, and workflows. It also provides a white-labeled client portal to exchange data and collaborate on meetings and due diligence questionnaires.
A network of governance supports clients that can provide hosting, operational support, regulatory advisory, and other support services.

2. Advanced logic analytics:
This UK based startup was founded in 2015. Riding on new age technologies, ALA has established a stronghold in the Compliance sector. It offers enterprise-wide big data and financial analytics solutions for buy and sell-side institutions and other financial firms. Their data science-led business offering and AI driven algorithms bring alternative data insights for financial institutions. By using machine learning-based analytic techniques, ALA develops and apply risk calculations. Communications and other source data are scored against a series of Key Risk Indicators (KRIs) to quickly pick up on any issues that could cause problems.

3. Agreement express:
Agreement Express provides onboarding automation software for financial services. Their platform allows wealth management and payments companies to deliver customer application, approval, and onboarding services across their offerings. They provide seamless integration to the back-office for compliance and risk workflows which is one of their most sought-after features.
4. Alyne:
The differentiating factor for this Munich based startup has been the market it caters. Alyne offerings include cybersecurity, risk management and compliance capabilities across all industries of all magnitudes. They call themselves “Business focused Software as a Service”.
5. Surety:
Surety caters to a niche segment of Regulatory Technology. They provide technology to protect the integrity of digital information using cryptographic time-stamping service. They are also one of the prominent providers of regulatory services such as IP protection and digital footprint preservation. Surety sanctions users to apply tamper-proof digital “Seals” to almost any form of electronic information. They are easily deployable across enterprise or cloud, providing long-term and independent proof with the guarantee that the information hasn’t been tampered since.
6. AppZen:
Appzen is an extremely impressive AI platform that utilizes machine learning to audit contracts, expense reports, and invoices. It integrates with all major ERPs, invoicing software, and expense automation products. This six-year-old startup is valued at $175 million and has recently raised $35 million in its Series B round. Appzen enjoys clientele such as Airbnb, Amazon, Citi Bank, Salesforce, Intuit, and 650 major organizations.
“The goal is to address all the domains in the CFO organization,” AppZen’s Chief Executive Officer, Anant Kale said in a statement.
7. AQMETRICS: 
AQMETRICS provides GRC (Governance, Risk & Compliance) software for financial services firms trading on the global financial markets. Headquartered in Kildare, Ireland (EU), AQMETRICS has raised almost $3.3 Million in investment so far. They specialize in providing unified market surveillance and compliance solutions to investment management companies. AQMETRICS serves a suite of cloud-based solutions and supports a full range of global regulatory reporting.

8. Arachnys:
Arachnys’ vision is focused on exploiting the evolving markets rather than already lucrative ones because they believe emerging markets, which are often fragmented and poorly organized will see an explosion of business information. Unlike their RegTech counterparts, Arachnys, therefore, targets the Eurasian market more extensively. Their primary emphasis remains attractive markets like China, India, Russia, and the Middle East.
Arachnys domain expertise caters to Customer Risk Evaluation lifecycle by using cutting-edge technologies such as Robotic Process Automation, Machine Learning, Intelligence, and Natural Language Processing.
Their products are specifically tailored to serve a diverse customer base and are extensively customizable.

2. Artificial Intelligence:

In the early days of banking, bankers used to have personal connections with their customers. Each step of the banking process involved customer-client interaction. But due to the digitization of the banking process, this personal connection has been lost. So, is it possible to leverage the same technology to get that human interaction back?

Many believe, A.I can be leveraged to bring back that connection.
Artificial intelligence (A.I.) will continue to govern FinTech in new ways. In 2020, we could see companies use A.I. to develop new commerce interfaces, with the number of companies looking into voice set to increase.
Let’s delve into the potential use-cases of A.I:

• Credit Scores:
In traditional banking infrastructure, there were a lot of customers who were underserved and ignored. They couldn’t apply for a loan because they didn’t have a credit score. Many startups have stepped up to bridge that crevice.
Various applications are coming up to assist customers who want to apply for a loan but have no credit history for the bank to review. Many tools and technologies such as Psychometric Analysis, Behavioral Detection, Predictive Analysis, and mining of the borrower’s data through the web, social media, geo-location and even browser history are being deployed to ensure a detailed evaluation of the potential borrower. These technologies let banks build a vivid picture that allows them to evaluate whether a candidate is creditworthy.
• Security and Fraud Control:
The banking sector is the single most targeted area by hackers and fraudsters for obvious reasons. This anomaly allows for the development of some of the most innovative and hi-tech solutions in this realm. Machine Learning, Natural Language Processing, Optimized Algorithms, and numerous other tools and technologies are being deployed by financial firms and new-age startups to address this issue. Many A.I tools have also come into use to analyze and observe user’s critical behavioral patterns and issue warnings in case of possible security infringement. Due to these developments, it was observed in the Q3 that consumers are increasingly becoming more at ease at using A.I-driven applications and digital payment gateways to carry out their financial transactions.
• Customer Support Automation:
Time and again it has been witnessed that most of the customer-facing processes are becoming obsolete by every passing day. They are being revolutionized by the advent of Chabots and Virtual Assistants. It could be easily figured out as to what exactly is driving that trend. Automation of customer-facing services address one problem that has always costed companies in billions of dollar – Human Error.

AI-driven platforms utilizing Natural Language Processing (NLP) are turning more human than ever. This combined with no possible error in delivery makes it an ideal fit. Chatbots can not only answer customer queries intelligently, but they can also be integrated with social networking sites, and accept requests for applications and orders directly from social media channels.

Gartner prediction for 2018, projected more than 2 billion people would be diligently using conversational A.I to interact with virtual assistants on different platforms. The outcomes clearly surpassed the forecasts.

Recommended Read: 7 Tips for Starting a Fintech Company

3. Blockchain will venture beyond Bitcoin:

The much-hyped technology upon which Bitcoin and other cryptocurrencies are based – The Blockchain, is all set out to venture beyond Bitcoin and will serve various other markets and domains. Keeping in mind the potential of Blockchain, several banks and financial firms have planned for considerable investments in the domain. Many companies have rolled out pilot programs across a range of industries, including – financial services, healthcare and even global logistics. Earlier in 2018, several banks in Asia conducted a pilot in which Blockchain was used to transfer funds across continents in a matter of few seconds.

The following could be the potential use cases that can come into light in 2020,
1. Weapons Tracking:Blockchain could help tremendously in gun control and weapon accountability. This could easily be one of the single most significant reform that could change the entire state of firearm distribution. And gun control being such a trending topic on almost every new network. Blockchain could create a completely transparent and never-changing registry ledger that allows law enforcement to track down weapons and guns ownership. It could also be utilized to keep a record of weapons sold privately.

2. Digital Voting:If you are worried about booth capturing or voter fraud. Then Blockchain will offer you a sigh of relief. Blockchain would offer the ability to vote digitally and at the same time be transparent enough that any regulator could see if any irregularity or fraud transpires. The decentralized nature and its immutability would ensure your vote truly counts.

3. Digital IDs:
Digital IDs with the help of Blockchain would be a boon for the impoverished and developing nations by giving them access to financial services. Tech giant Microsoft is already planning to venture into the domain by creating digital IDs within its Authenticator app.
4. Real Estate:
Since paper trails are frequently a source of confusion, it is entirely possible that Blockchain will take paper out of the equation. So, if one plans to buy or sell land, a house, or even a car you’ll just require to transfer the title. Thanks to Blockchain these titles will get stored on the network allowing for a crystal clear picture of the legal ownership.
5. Record keeping of medical records:
Patient privacy would be utterly discreet by the introduction of Blockchain in the pharmaceutical sector. The patients who possess the key to access these records will be in complete ownership of their data and will control who can access or view that data. Thus strengthening the HIPAA laws that are designed to protect their privacy.
6. Managing IoT (Internet of Things) networks:
Many networking corporations have announced that they are working on a Blockchain based application that will monitor the Internet of Things network. Such an application would help determine the authenticity of the devices on the network and would continuously do so for devices entering and leaving the network. This could drive a significant shift in device-to-device integration.
Recommended Read: How is BlockChain Revolutionizing Banking and Financial Markets

4. Financial Inclusion:

In the largest ever gathering of FinTech firms in Singapore, Indian Prime Minister, Narendra Modi introduced attractive policies and plans to invite investors to the Indian landscape.
“I say this to all the FinTech companies and startups: India is your best destination,” said Modi, the keynote speaker at the Singapore FinTech Festival.
In Nigeria, FinTech startup NetPlus has come with a solution that provides simple and reliant digital payment system to the consumers. So, consumers of Nigeria who were generally skeptical when it comes to e-commerce, have embraced the platform.
Developments such as these are proving to be an excellent boost for evolving markets such as India, Brazil, Nigeria, Indonesia, and several others. Earlier when the FinTech hubs used to be just San Francisco, Singapore, and London, such developments are driving investors to these huge rewarding markets. This shift in the market will gain significant traction next year and developing nations would possible see tremendous growth in investments across FinTech and RegTech. Also, several financial establishments are planning to open up new premises in these countries which definitely suggests what is expected to come our way in 2020.

Wrapping up

My prediction for 2020:

It is big, It is growing, and It is disruptive.

FinTech would be the second-most significant transformation in Finance, since the first permanent banknotes. I believe, Financial Technology would not only disrupt the way we purchase and invest, but it would also alter the very definition of money itself.
FinTech 3.0 is upon us and banks, and financial firms will enjoy a roller-coaster ride riding on the FinTech wagon.  2020 will be the year of banks acquiring FinTech firms, or waiting for their slow demise. Those who catch the FinTech train would bolster, and the rest would be gasping for air.
After all, it is true what they say – You snooze, You lose.
EngineerBabuteam excels in creating fintech products utilizing the latest tech stacks. This is why so many of our clients have gone on to acquire record funding from renowned investors. One such dear customer of ours, BankOpen, a neobanking platform, recently raised $5M in Series A led by Beenext, Speedinvest, and 3one4 Capital. We possess solid domain expertise in developing FinTech products. Feel free to reach out to us for a free consultation.
What do you think of this article? Feel free to drop your comments in case you have any suggestions or queries. We’ll get back to you with 24 to 48 hours. 

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The post AI & Blockchain in Banking or FinTech appeared first on EngineerBabu Blog.

Why you need a FinTech Company for your business?

Online platforms in financial technology can be driving force for the growth of businesses by leaps and bounds. For instance, FinTechs can help credit unions and banks build a thriving B2B business without any hassles. It can majorly contribute by enhancing efficiency, reducing costs and downtime.  This, in turn, can be directly proportional to increased productivity and better utilization of available resources.
Evaluating the pros and cons can help you make the right choice according to your requirements. The key to choosing the right partner for your business will revolve around measuring certain compliance, risk tolerance, and customer service factors. In short, your FinTech partners should operate under the same high standards so that they can manage your processes without tainting your reputation. Here are a few things you need to know as to why you FinTech partner is indispensable for your business:

•    Minimized risk and maximized positive impact:

First and the foremost factor which you need to consider is an easy identification of what is missing from your current offerings to the customers. It is quite possible that your customers aren’t really looking for a new service or solution. All they yearn for is a better and efficient access to products they already have.  Hence, finding the right partner will help you improve your streamlined processes and existing product line. This, in turn, can significantly impact your approval time and underwriting positively. In this way, the needs of your customers will be fulfilled and result in lowering of your risks.

•    Increased transparency:

Ensure that you choose a FinTech partner who is completely transparent in their offering. Advertisements can often be misleading when very few loans qualify at that rate. Make sure that your lending platform partners are willing to share their actual APR range of loans. Always remember that your customers expect you to be very responsible for the service the partner provides. Thus, never compromise on these intricate details otherwise you might stake your reputation for no positive results.

•    Demand built-in compliance:

With an increase in compliance costs, you should seek FinTech partners which already possess built-compliance technology which can help you mitigate the risks and improve your savings. You can choose those partners which are working under the same banking standards as you, with a regulated protocol and uniform processes. Their ultimate goal should be to help small businesses grow exponentially without ruining their credibility in the market. Built-in compliance technology can thus play an instrumental role in driving down the overhead costs.

Hence, choosing the right FinTech partner can turn out to be a blessing in disguise. You need to stand out in the crowd in the competitive market by improving your efficiency, delivering speed and providing low-cost loans. Technological advancements in the finance sector can help banks accelerate their working processes. But, you need to be cautious as not all FinTech companies will share the same principles, standards, and goals as you. Thus, study the market trends properly before you step out in the market to choose your right FinTech partner.

Top 10 Reputable FinTech Companies For Your Business:

1.  Stripe: 

Valued at a whopping $9.2 billion, this fintech pioneer ‘s mission is to transform the workings of internet business. Founded in the year 2010 by Irish brothers, Patrick and John Collison, Stripe has achieved indefeasible feats by supporting online transactions for various bigwigs like Uber, Google, Spotify and more. Its ultimate goal is to ease out the process of secure and fast payments. It provides APIs to clients so that integration of online payment systems with their websites and apps can be smooth. Apart from that, it aims at building flexible and powerful tools for internet commerce.
Stripe’s unmatched functionality and meticulously designed APIs help create the best possible products for users. Undoubtedly, it is a one-stop destination for the creation of subscription services, crowdfunding platforms, an e-commerce store and more. This technology company builds economic infrastructure for the internet by helping out businesses of every size. It combines a payment platform with applications that put revenue data at the heart of business operations. Millions of world’s innovative technology companies are scaling efficiently by building their businesses on Stripe. No wonder, Stripe has occupied the top positions in the Top 10 list of FinTech Companies.
2.  Sofi:

Sofi has made a mark in the FinTech industry by helping people achieve financial independence. It follows a unique approach to offering lower interest rates and lending to encourage big savings. Sofi has brought the necessary disruption in the US personal banking sector, by putting the consumer first. With student loans mounting up and credit scores going down, acquiring money from a bank became a tedious task at hand.
It established itself in the market by targeting student loan refinancing for Standford MBAs. But, with time, it moved forward with providing personal loans, mortgages and wealth management. Currently valued at $4.3 Billion, the company has grown exponentially in a short span of time. Founded in 2011 by Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady, the company has explored various economical alternatives for students depending on loans to finance their education.
3.  GreenSky:

David Zalik, a child prodigy who began attending college at 14, founded GreenSky in 2006 in Atlanta, Georgia. GreenSky stands tall in the market among other FinTech companies as it specializes in consumer finance marketplace. Their areas of expertise include Retail and Home Improvement. They have built their customer base in over 50 states of USA. They strive to transform small businesses and consumer credit mechanism by enabling pervasive and affordable access to financing.
GreenSky has funded over 12 billion loans and worked with more than 1.7 million customers. Apart from that, it is in collaboration with over 14 large banking institutions which aim at granting loans to customers through an easily accessible mobile app. GreenSky also financially supports medical procedures that may not be included in insurance such as cosmetic surgeries, dental assistance, visionary care, pet medical services and more. It has emerged to be a sought-after alternative for credit cards. In this internet driven era, where people are used to getting everything done with a single click, the instant lending option by GreenSky is changing lives for the better.
4.   Credit Karma:

Founded in the year 2007 by Kenneth Lin, Nichole Mustard, and Ryan Graciano, this company has proved to be an emerging player in the Financial sector. Its ultimate aim is to provide free access to credit scores and reports to its reliable customers. Also, you can viably make informed financial decisions by seeking the advice of their experts. Credit Karma holds great years of experience in providing financial management and free credit services.
Some other areas of its expertise include monitoring unclaimed property databases, free tax preparation and recognizing and disrupting credit report errors. It receives most of its revenue from targeted advertisements. It generates customers’ credit scores and reports from Transunion and Equifax with weekly updates. This customer credit data is then analyzed by the company in order to recommend financial products to the users. Any purchases of the financial products bought through Credit Karma recommendations generate revenues for them in terms of commissions paid by the banks. Also, its massive social media campaigns have helped it to gain recognition all over the world. In 2015, it began its MyMoneyStory online campaign encouraging people to talk about personal financial problems and issues openly and share stories of their financial woes, a rarely discussed topic in American society. No wonder that it has occupied the top charts in the Top 10 list of FinTech Companies.
5.  Oscar:

Founded in 2012 in New York City, Oscar strives to use technology to humanize health care. Its founders namely Mario Schlosser, Josh Kushner and Kevin Nazemi aimed at establishing health insurance company centered around the patient, engaging members and guiding them to the right care. In an attempt to make healthcare simple, smart and user- friendly, Oscar has hidden all the complexities of the process behind a simple and accessible user interface. It offers all its members free 24/7 telemedicine visits through their Doctor-on-Call Service.
A Concierge Team, comprising of three care guides and a registered nurse capable of handling everything from customer support questions to clinical coordination, is assigned to each of its members. It provides direct appointment scheduling and a clinical dashboard bringing all of the patient’s medical histories on a single platform. Today, Oscar drives the highest levels of engagement in health care, helping over 250,000 individuals and businesses from startups in Brooklyn, New York to bookkeepers in Bouldin Creek, Austin – take charge of their health.
6.  Avant :

Founded in 2012 by Al Goldstein, John Sun and Paul Zhang, it started with the aim of lowering the barriers and costs of borrowing. This Chicago based online money lending company strives to make the process of loan transaction smooth and user-friendly. Its founders Sun and Zhang graduated from the Y Combinator startup program in 2012 and wanted to build their business, Debteye. The application process for the business loan was tedious and, lead to frustration and desolation for them both. They decided to start Avant with the aim of making loan processes easier for other people.
Avant uses custom technology and analyzes customer data to provide personal lending and credit scoring options. While most of the lenders look at the financial history of the customers, Avant focuses on what they can achieve in the future. They study the behavioral and emotional patterns of the customers and not just their financial reports in order to provide them tailor-made lending options.
7.  Zenefits:

Zenefits is a promising American company which was founded by Park Conrad in 2013. It aims at providing cloud-based HR software as a service to its clients. Multiple HR services such as health insurance, payroll compliance, paid leaves, stock management options are taken care of by Zenefits. It follows a hub-and-spoke model for generating revenue. The cloud-based software service(hub) is provided to the customers for free thereby making it easier for the business to import all the employee information in Zenefits. It makes money through the spokes such as Health Insurance and Payroll by acting as a middleman between the companies providing those services and its clients. Therefore, it generates revenues in the form of commission. Zenefits has helped small startups tremendously by automating HR processes for them. Its network is spread in Tempe, Chicago, Atlanta, and Vancouver. Its goal is to bring technological disruption in an industry where usage of dot-matrix printers and fax machines is preferred.
8. Prosper:

Prosper was founded in 2005 as the first peer-to-peer lending marketplace in the United States. Since then, Prosper has facilitated more than $13 billion in loans to more than 850,000 people. It is an online platform which encourages people to invest in a way that is financially and socially rewarding. Borrowers can apply online for a fixed-rate, fixed-term loan between $2,000 and $40,000. Individuals and institutions can invest in loans and earn attractive returns. Prosper handles all loan servicing on behalf of the investors and matched borrowers. Prosper Marketplace is backed by leading investors including Francisco Partners, Sequoia Capital, Institutional Venture Partners and Credit Suisse NEXT Fund.
Founded by Chris Larsen and John Witchell, it maintains a full public database of all loans issued through its marketplace on its website. This database and all market statistics can be accessed and evaluated for analysis of loan performance over time. It follows a transaction-based business model, charging customers a nominal fee for each transaction. It verifies the borrower’s identity before processing loans and manages every stage of the process.  For the first three years of its existence, it followed a variable rate model functioning as an E-bay like online auction marketplace. In 2010, it filed a new prospectus at the SEC, altering its business model to use only pre-set rates determined exclusively by a prosper formula. Instead of auctioning for rates in an unmoderated and sometimes unfair auction process, lenders have to just make a simple choice now. They can invest at the rate assigned to the loan by Prosper’s loan pricing algorithm or not invest at all.
9. AvidXchange:

This American FinTech company provides automated payment solutions and account payable options to medium-sized businesses. AvidExchange was founded in 2000 by Micheal Preager. Catering mainly to real estate, financial services, energy, and construction sectors, it aims to make the process paperless and hassle-free. It provides electronic invoice capture, invoice approval workflow, invoice and bill payment reporting, utility bill analytics and payment solutions, centralized invoicing processing, account payable solutions and accounting system integration software solutions. It eliminates the outdated manual processed that lead to fraud, delay in payments and painful audits. Comprised of a family of 800 employees, AvidExchange witnessed a 3-year growth of 285% in the year 2017.
AvidXchange strives to give you the power to reduce processing costs, accelerate approvals and eliminate paper with more transparency into, and control over, spending than what you have ever had. AvidXchange gives you the power to automate manual tasks and spend your time doing more valuable tasks. Purchase-to-Pay (P2P) automation is all about eliminating manual processes and becoming more effective and efficient.P2P Automation streamlines the entire process from purchasing all the way through payment for enhanced reporting, optimal spending and better budgeting for your entire organization. Their leadership team is comprised of a representative from every functional area of our business. Their experts aim at creating strategies that can help your business grow manifold.
10.  Robinhood:

Robinhood is a mobile-application based service allowing an individual to invest in publicly traded companies and exchange-traded funds listed on U.S. stock exchanges without paying a commission. The billion-dollar enterprise was founded by Vladimir Tenev and Baiju Bhatt. In order to keep the fees down, the company has no storefronts and provides no additional tools. Aptly named after the popular fictional character, it is helping the less economically privileged grow by using and betting on rich people’s money. The fintech app has eliminated all brokerage fees that have traditionally been associated with initiating a buy or sell. It earns money through its Robinhood Gold accounts for premium members and by collecting interest from cash holdings and stocks just like a bank. The app is simple and clutter-free making it easy to use for everyone. Robinhood’s platform has fed directly in the application that links out to some popular free resources such as MarketWatch and Seeking Alpha, providing you all the necessary information you need about the market.

Conclusion

We can expect Fintech start-ups to engage with the established industry contenders and focus more on the customer experience and services in the digital era. In the long run, Fintech will have to invest more in innovation techniques, risk management, and partnerships through collaboration. This will be of great aid to both the banking sector and Fintech companies. It also needs to innovate its business models and find their place in the B2B sector. Furthermore, Smartphone would prove to be an important distribution medium for engaging with customers in the future.
Also, traditional financial contenders can explore the growth opportunities through new monetization models. And banks will have the benefits from the financial technology company ’s knowledge to develop the insights about the needs of their customers. Interpersonal relationships, on-demand, and smooth transactions are what new age customers are looking for. Therefore, the opportunity is huge for Fintechs to add value by employing big data, artificial intelligence, machine learning to the financial services.
Fintech is constantly developing and maturing and many fundamental tasks still need to be explored. NIFA is willing to work together with every country to strengthen communication and cooperation, to learn from each other, and to jointly promote fintech worldwide. With fintech firms, central banking is not an issue as lenders and borrowers are matched with each other to make a more stable credit exchange. It has the potential to completely change the way banking functions. FinTech is taking the age-old method of borrowing and lending without the existence of separate institutions and is challenging the territorial habits of traditional insurance and banking services.

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