IEBS Business & Tech Finance Blog What is Fintech, definition, sectors and examples of startups
What is Fintech? Can we trust Fintech? How can I benefit from this new financial trend? The concept of Fintech is still in the process of being defined as it is a relatively recent term and that little by little we will see how it is emerging.
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The origin of Fintech is the contraction of the English words ‘finance’ and ‘technology’, which encompass the services of companies in the financial sector which use new technologies to create innovative financial products.
INDEX OF CONTENTS
What is Fintech?
In principle, we can define Fintech as a concept that brings together those financial technology companies that try to contribute new ideas and that reformulate, thanks to new information technologies, mobile applications or big data , the way of understanding and providing services financial
The latest in Fintech: decentralized finance
6 Fundamental objectives of Fintech initiatives:
How new financial services can be offered
How to add value to today’s financial services
How to disintermediate financial products that can be offered person to person
How to make current services more cost-efficient
Allow more access to financial services , or allow greater transparency in the financial offer
Use technology to provide better solutions to financial services
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What are the areas and sectors on which Fintech acts
Big data and predictive models
Cryptocurrencies and altcoins
Automated process management and digitization
Payments and transfers
Security and privacy
Financial advisory services
What is the current state of Fintech and what are your expectations for the next few years?
Based on the numbers, we can assure you that it is a sector that has come to stay and that there is no doubt that some financial institutions such as BBVA have already moved to clearly position themselves in this transformation of the financial sector promoted by Fintech. Worldwide, in just three years the alternative financial Australia Business Phone List grew by 48 percent. Within European countries, Spain ranks as the sixth largest alternative financing market, growing from 6.3 million in 2012 to 2 billion in 2014. In Spain, around 60 million euros were moved last yearin alternative financing, a figure that shows the consolidation of Fintech companies in our country. For example, only the Spanish Fintech already brings together more than 300 Spanish SMEs and freelancers. Only through these Fintech platforms, 5 million euros have been financed and it has grown by 240 percent in the last year. Fintech financial services startups are the most promising in the world according to the most active investors in recent months.
Examples of the most relevant international Fintech startups
Adyen: Multichannel payment service. It provides payment services to about 3,500 businesses, including Facebook, Uber, and Airbnb.
AvantCredit Online consumer loans. It uses algorithms and machine learning with artificial intelligence, to offer personalized personal loans.
Betterment Automated Investment (Robo Advisors) that simplifies the investment process.
CommonBond: P2P student loan
Aol Email List with data algorithms to calculate financial risk.
Etoro: Social Investment Network. The social trading platform offers its users access to global markets allowing them to see other investors and invest in them by automatically copying their operations.
Ant Financial Services Group serves 20.87 million small and medium-sized enterprises (SMEs) in 2019 alone.
Examples of Fintech companies in Spain
Captio (Business Expense Management)
Kantox (Currency exchange)
Novicap (Invoice Discount)
ExactaTax (Automatic Billing and Accounting for Freelancers)
Zank (Financing for individuals)
Launch us (Crowdfunding)
Bestaker (Equity Crowdfunding)
Fintonic (Financial aggregators)
Finanzarel (Discount of invoices and promissory notes)
Arboribus has achieved a financing volume of € 19,708,810 with 442 companies financed.
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Regarding its activity in Spain, where there are already 385 companies of this type, credit companies occupy the first position. Behind we have those dedicated to electronic payments, which account for 15.06% of the total. Investment companies and organizations offering accounting and tax solutions would total more than 22%.
If we focus on the territory in which they operate, Madrid concentrates 56% of this type of companies. It is followed by Barcelona (19%) and Valencia (7%).
But what entrepreneur profile is behind these companies? According to the aforementioned study, 93% of companies in the modern financial industry were started by groups of entrepreneurs, while 7% were created by a company already on the market.
Regarding the attractiveness of this type of company for investors, it should be noted that last year more than 190 million euros of financing were raised, and that for five years more than 400 million euros have been raised in more than 240 rounds financing.
This map shows the variety and quantity of existing companies in the Fintech sector in Spain:
What is the process to start taking advantage of Fintech?
Most of the companies mentioned above, if they are characterized by something, is the usability and ease of use of their applications. In other words, simplicity, innovation and added value for the user predominate, which in itself is already a plus. The process is very simple, you just have to create an account and, depending on the case, define your role as an investor, as a provider or as a service seeker. In the sector there are also many collaborative consumption platforms that further democratize access to financial services , generally with fewer obstacles and also with better conditions for the investor and the applicant.
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