Key trends among Fintech startups

In January 2012, Swift launched the Innotribe Startup Competition of Internet startups to bring together leading startups and major players in the financial services market in one place. This experience was one of the first of its kind. In subsequent years, several more similar events took place. Today, fintech hackathons and various competitions are held regularly throughout the world. So this year alone, 18 fintech hackathons and startup competitions will be held. O'Reilly analyzed 186 winners in 18 fintech competitions and hackathons in order to find out the key trends among fintech startups. In this post we will share with you the results of this study. At PayOnline, which allows you to accept payments on the site, we carefully monitor the fintech sphere, as We ourselves are a financial and technological service.

Ideally, the goal of any fintech startup is to break through in the industry and displace traditional financial institutions through the introduction of advanced technologies, products and design. At the same time, financial institutions focus on secure global money transfer, payment and lending systems. In fact, startups and large companies do not have to compete. It is difficult for large players to change the existing structure of the business from within, this is the lot of startups - they are testing new business models and pushing the boundaries of technologies that are free from excessive regulation and corporate barriers. Hackathons and startup competitions are just the place where aspiring entrepreneurs and developers can share their innovative ideas and test them, having received the approval of investors.

But what exactly is innovation focused on? 186 winners in 18 fintech competitions and hackathons were analyzed, including Innotribe's Startup Competition and Future of Money and Tech Startup , Hackathons Money2020 , Bankathon and BBVA Innovation, and some other, smaller events. The list also included 25 fintech startups with a total value of more than $ 1 billion. Analysis of the winners of the competitions revealed a number of trends in the financial technology market - from big data to transactions and banking.

This graph shows the percentage of winners in each category:

As you can see, startups involved in data processing took first place - they account for almost 19% of all analyzed startups.

The study identified the following key trends:

Data analysis for better decision making

Startups are increasingly offering data analysis services as a service for the comprehensive verification of loans and transactions, in order to predict the success of credit operations and determine which of the clients may qualify for the preliminary approval of a new loan or refinancing of a student loan. And the more information our devices collect about us and the world around us, the more we need reliable, more advanced data analysis.

Payments and international transfers

Payments and international transfers are the heart of money transactions. Startups in the industry are focused on numerous payment methods, including credit cards and mobile applications, perpetual subscriptions, contactless payments and Bitcoin payments. The demand for instant and free transactions has prepared a field of activity for innovative fintech projects. One of the decisions taken by startups is to use a distributed accounting ledger with which you can speed up international transfers.

Lending

Startups in this category work mainly with P2P lending and crowdfunding. This category is associated with data management (Big Data) more than others. After all, companies need to understand which clients (private individuals or small businesses) are the most reliable borrowers, understand how the lending sector operates in principle, analyze the data for legal expertise, and assess the possibility of preliminary approval of a loan proposal.

Financial Solutions for Small Businesses

Startups in this category develop solutions that help small businesses with accounting, billing, and payroll. For larger enterprises, startups offer services for employees - short-term loans, automatic accumulation and investment services.

Here are a few companies that are particularly interested in the author during the analysis of the winners of the competitions. The teams of these projects have demonstrated extraordinary thinking, which is characteristic of creative startups.

• Kill Bill , an open-source product, a member of the 2014 Money2020 hackathon, attracted attention with a simple solution to the problem. The Kill Bill panel manages subscription payments. Each time you crack your credit card, you can easily resume your regular payments even with a new card.
• Trusting Social is the finalist of the Innotribe Startup Challenge and Future of Money and Tech contests. “Credit score 2.0” - this is what developers call their product. The service uses the data of modern reputation systems for a comprehensive analysis of a person who wants to get a loan, which is much better than outdated FICO estimates.
• Credibles is the finalist of the Future of Money and Tech 2013. Startup combines local small food companies and subscription-based crowdfunding. Credibles was created to make local food more diverse. The idea was supported by the Whole Foods supermarket chain.
• Geolocation stock discovery - a startup with a hackathon New York FinTech offers a new way to search for investment objects based on geolocation.

The trends are obvious: while people and companies use data to make decisions, startups take advantage of the moment and offer new products and services. Loans and borrowings will not disappear, but more often your creditor will not be a bank, but a society (if it comes to crowdfunding) or a group of financial institutions. We are waiting for the emergence of new solutions for payments and international transfers, as many are looking for ways to decentralize the technology to increase the speed and efficiency of the transfer. In the end, who wants to wait for their transfer 1-3 business days when Bitcoin and Paypal offer instant transfer?

The market for financial technologies currently gives startups tremendous opportunities, because market leaders are seriously thinking about how to apply new technologies, products and services in their organizations. In turn, fintech startups are working to meet these growing market needs. And there is no doubt that the ideas of startups who won competitions and hackathons this year are only a small part of what we will see in the future.

The translation has been prepared for the PayOnline corporate blog , an international system for accepting and processing electronic payments.