startups - Jacob Parker-Bowles

Fintech is, as its name alludes, a field that combines both finance and technology. The companies that fall under the fintech category often specialize in account management, lending, financing, financial assets and capital markets. However, fintech’s main point of attraction for businesses large and small is its dedication to meeting customers’ needs.

Unsurprisingly, the fintech industry is booming, with at least a dozen new companies reaching unprecedented success shortly after their inception.

With that in mind, let us take a closer look at the top fintech companies around the globe:

Adyen

Founded in 2006, this Netherlands-based company provides its clients with the ability to accept payments from around the globe with a single platform. Since it expanded its software to accept payments from online and mobile orders, Adyen has seen an influx of high-profile clients — namely, Facebook, Netflix, Uber, L’Oreal, Burberry, and Microsoft. Because of this spike in popularity, the company nearly doubled its revenue to $700 million in 2016.

Klarna

Headquartered in Stockholm, Sweden, Klarna is focused on improving the online shopping experience via an optimized checkout system. Since the company got its beginning in 2005, it has served over 45 million end customers and added big names such as Disney, Spotify, and Samsung to its list of clients. At the end of 2016, Klarna was valued at over $42 billion.

Avant

Founded in 2012, Avant is an online lending platform that is dedicated to lowering the barriers consumers face in borrowing money. Although this United-States-based company does not necessarily have any high-profile clients, it has reached over 500,000 customers and accrued a loan portfolio that is worth over $3.5 billion — an impressive feat for such a young company.

Oscar

Founded in 2013, this innovative company has taken the customer service aspects of fintech and applied them to the health insurance industry. Oscar’s goal is to encourage uninsured Americans to purchase policies by quickening the application and approval process, and providing access to full-coverage plans that boast affordable premiums. In addition to its admirable mission statement, Oscar also boasts a prominent list of investors that includes Google Capital, Fidelity, and Khosla Ventures.

SoFi

Launched in 2011 by four Stanford business students, this San Francisco-based fintech startup promises to be “a new kind of finance company.” Clearly, SoFi’s unconventional approach to lending and wealth management has been successful, as the company now boasts over $19 billion in funded loans and over 300,000 members across the country.

Fintech is taking control of the future of finance across the world. There are multiple aspects of financial technology that will be shaping the way we handle the exchange of money. Whether it be transactions from smartphone or advancements in accounting, fintech has full control of how we manage finances in the 21st Century.

Adapt or Die

With apps already out like Venmo, large corporations are trying to get ahead in the technological race to adapt fintech. Apple has already begun to get a leg-up on the fintech world by releasing Apple Pay. The accessibility of money has been demanded by consumers and Apple is listening. Big banks are starting to find they may be losing the battle against financial technology if they do not adapt. While this may be bad news for traditional small banks, large financial corporations are beginning to invest in fintech start-ups.

The advantages for big banks to invest in these start-ups are due to their ability to have fast innovation and edge. As well, financial technology allows users to make decisions that are more precise and fast. Why would customers stay at slow financial institutions when they have the ability to utilize resources like one-click loans or secure credit card processing?

A Mutual Relationship

Banks have viewed the growth of financial technological companies as a threat to their business and industry. Yet, there is a great opportunity between large financial corporations and fintech companies trying to gain traction. Large banks need the innovation that these start-ups have and the start-ups need the financial support and tracking that the banks can give them. Partnerships between the industries could prove beneficial for both.

Essentially, it comes down to both parties finding a middle ground to benefit from one another. The heart of fintech comes down to innovation, collaboration, and openness. If banks do not realize this and change their business model, they may end up on the sidelines while small start-ups take their place.

Across The Globe

Countries like Brazil have started to see the effects of banks not collaborating with new fintech businesses. Many large banks such as Itau and Banco Bradesco has slowly been closing their physical banking centers due to the changes in the industry.

India’s banks, which dominate the country’s financial landscape, also have a grim outlook. An online payment company, Paytm, announced a $1.4 billion invest while large banks are struggling to keep up.

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Tag: startups

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