OCTOBER 28, 2020
7 min read
With more than $34.5 billion scooped in funding, there’s no denying that the global fintech market is growing larger by the minute. And, while one can cuddle with this comforting thought while planning their next bold move into the ruthless world of startup endeavours, we can only recommend you to step back and take a closer look.
As always, where there’s Big money involved, there’s also ruthless competition lurking around the corner. It’s best to proceed with caution while keeping an eye on some of the larger players as there’s always a chance to learn from both their success… and occasional mistakes.
But before we can move on to the companies themselves, let’s first take a look at the major fintech industry trends that are destined to be the most profitable in the upcoming future. Measuring these trends as well as the demand they generate against the niches the companies from the top 19 list are taking is an excellent mental exercise.
5 Fintech Trends to Dominate in 2021 and Beyond
Core fintech industry trends are much simpler to spot now than ever as the industry is under a much brighter spotlight now than ever before. And yet, it is still quite simple to get lost trying to identify whether reg-tech, blockchain, or cloud is more than yet another buzzword destined to burst like a bubble in a couple of years.
- Cybersecurity. Yes, 71% of adopters prefer digital banking products despite rising security concerns, yet even customer support will not save a company from facing multi-million losses as long as you are not on the level of Monzo or similar startups.
- Cloud. Cloud tech has already infiltrated CRM, HR, and accounting departments in most companies as more than 94% of enterprises use Cloud. Now it is spreading to KYC verification as well as advanced security analytics. Cloud’s soon-to-be dominance in the fintech niche is further proven by the recent collaboration between IBM and The Bank of America who are working together on a fintech public cloud.
- Reg-tech. Reg-tech is a term that stands for automated regulations solutions such as tracking an organization’s compliance or tracking airline’s locations in real-time can really streamline the regulation process. And given how heavily regulated the fintech industry is at the moment, a viable reg-tech solution is worth more than gold.
- AI. Technology may not be as intelligent as human beings (yet) but if there’s one thing where it excels, it is at collecting and interpreting data. And with most complex regulations moving towards KYC AKA Know Your Customer systems operating in real-time, the impact a decent Artificial Intelligence solution may have in the middle office is undeniably important. And with 51% of companies from the United States and the UK lacking specialists to put in strategic AI-related positions, your new out of the box solution may save them (and make you) millions of dollars.
- Catering to the unbanked population. Yes, we’ve saved the sweetest slice of the fintech trends pie for last. According to the World Bank report, more than 1.7 billion adults remain unbanked globally. They mostly live in developing countries such as Indonesia, Mexico, Nigeria, or Pakistan, yet there is a great need for banking solutions in such highly dense markets as China and India as well. And given that after a single five-month relief program in Niger its people have each saved an average of 20 hours of waiting and travel time by simply switching from cash to mobile proves that there isn’t only room to grow but also a large demand for a new revolutionary mobile banking startup!
Now that we know a little bit more about the demand (and about where the real money is) we can, without further ado, move to the list of the top 20 fintech companies to keep an eye out in 2021.
#1 – Bowtie
Originally founded in 2018, Bowtie is nonetheless the very first virtual insurance company that offers full digital insurance services to the residents of Hong Kong. The innovative technology Bowtie is known for allows for swift and intuitive quotation, claims, and underwriting services 24/7/365.
The rapid growth of the company has led to the recent announcement of collaboration between Bowtie and 3 Hong Kong, the mobile arm of Hutchison Telecommunications Hong Kong. The companies are working together to launch 3Care, a mobile insurance platform for the cell giant’s subscribers.
#2 – Chime
Chime is a mobile banking pioneer from San Francisco. They have built a vast audience of users around automated savings account offerings and early payday functionality.
The fact that the startup charges minimal fees serves as a cherry on the icing resulting in them becoming the fastest-growing bank in the United States.
#3 – Varo Money
Yet another fintech startup from San Francisco, Varo Money is a digital bank that offers an excellent app with features that go quite deep. They offer their users a complete look into their finances as well as checking and savings accounts. Additionally, the app displays such information as analytics of spending habits and allows instantaneous transfers.
#4 – Brex
Brex features a credit card designed for corporate use. A 10X-20X higher credit limit paired with 30-day payment cycles makes it a perfect choice for companies. The built-in loyalty system that awards points in order to increase the limits even further and offer additional benefits serves as the perfect cherry on the icing for corporate clients.
#5 – Tala
Tala is a handy banking app that takes notice of the unbanked population and offers its services in Tanzania, the Philippines, Kenya, and Mexico. They offer credit card access to people who do not have a credit history making them a perfect choice for low-income countries.
#6 – Avant
Avant is a loan service designed around serving middle-income customers. The range of their loans varies between $2,000-$35,000.
The success of the service is built upon convenience. Avant’s customers do not have to worry about unexpected bills or debt consolidation. The application process is simple and intuitive and it takes as little as a day to get the money onto a user’s account.
#7 – OnDeck
OnDeck is a solution tailored to offer more flexibility to small business owners. Credit lines, long-term loans are available to users within a day.
#8 – Enfusion
Enfusion is an integrated management platform designed around hedge funds and financial institutions that manage assets. The functionality of the platform is quite robust, offering trading, risk management, accounting, and compliance functionality. In simpler words, Enfusion offers companies a complete overview of their financial assets as well as the tools to grow them.
#9 – Yapstone
Yapstone offers a comprehensive payment platform. Their painkiller? The company simplifies international money transfers for specific and niche businesses.
In addition to that, Yapstone powers several leading marketplaces such as RentPath, HomeAway, and Evolve Vacation Rental Network.
#10 - Wealthfront
Wealthfront offers an automated investment platform designed with millennials in mind. Their main benefit revolves around flexibility that is needed so much today when a new generation of users starts thinking about a retirement plan or an investment in real estate.
Wealthfront is based on automating passive investment strategies. As such, it generates decent rewards without overwhelming risks or being too prone to the shaking market.
#11 - SoFi
SoFi is a San Francisco based loan, wealth management, and refinancing service provider. Their services include assessment of a user’s rate as well as the likelihood of them repaying a loan.
The company has worked out a pretty complicated algorithm that gathers much more data than one’s credit history or income. Such factors as the choice of a career path, education, and more are added into the mix for getting a much clearer picture regarding a person’s financial capabilities in the long run.
#12 - Netspend
Netspend from Austin, Texas, has designed a product that simplifies management of one’s finances between several reloadable prepaid cards.
The solution, while not groundbreaking, is a great choice for users who prefer digital banking methods to a traditional account.
#13 - Nerdwallet
Navigating through the convoluted world of investment, personal finance, asset management, and insurance can be challenging to a lot of users.
Nerdwallet offers an all in one solution that simplifies these processes and gathers investment how-to’s, bank and card comparison, mortgage advice, and more into a handy lightweight application.
#14 - GreenSky
GreenSky is a loan platform that caters to small businesses and general consumers. Their range of services covers healthcare, home improvement, and retail loans.
#15 - Kabbage
Kabbage is an online financial service platform that offers lending services to small businesses. Their goal lies in simplifying access to capital. Their credit lines of up to $25K offer businesses a quick boost and the ability to grow and scale quickly.
#16 - Credit Karma
Credit Karma reveals what’s going on under the hood of credit history. Their services demystify the algorithms used to assign credit scores and the service, as well as the reports it provides, is free to use.
Credit Karma uses generated information to suggest the best loaning and credit options to its users directly from their website.
#17 - Transfusion
Transfusion began their journey into the world of fintech as a credit reporting agency. The company quickly used its technological know-how to grow into a prospering financial service provider. Now they deliver Big Data and insights to businesses, governments, and individuals.
#18 - CommonBond
CommonBond is a loan management platform for students. The company offers a variety of loans to graduate and undergraduate students and their service works with the clients from the beginning of their college career and up to post-graduation refinancing.
#19 - Carta
Carta is an investment platform designed with company and employee equity management in mind. The company helps with back-office processes, portfolio management, and compliance with IRS and SEC regulations.
As we can see, the trends that are shaping the fintech industry have a major effect on the most prominent startups popping up in the US, UK, and beyond. Use these examples of successful companies that have managed to navigate their way through the complex world of financial technologies as inspiration and, perhaps, an answer to several of your strategic questions.
And don’t forget you can always rely on experienced fintech development and consulting vendor for additional help and scalability.