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Understanding FinTech ecosystem: where to start a personal finance startup?


Maryna Cherednychenko - February 6, 2020 - 0 comments

Findexable claims there are seven thousand FinTech companies in the world that operate in 65 countries. These are huge enterprises and smaller startups working in B2B and B2C sectors. If you think of launching your FinTech business, we recommend peeking on the B2C side. It is rather a beaten track that has a well-formed ecosystem and segmented market.

FinTech trends

According to Statista, the most popular fintech category in 2019 was money transfer. Around three-quarters of digitally active users have such applications on their smartphones globally. Insurance takes second place, with almost 50% active users. Financial planning, borrowing, and personal investment software share the third position. Nearly one-third of users have such apps installed. 

Below, we have explained these categories and more. The examples of success stories may give you ideas for a win-win project.

 

Consumer fintech adoption rates globally from 2015 to 2019, by category

Consumer fintech adoption rates globally from 2015 to 2019, by category

PayTech

Money transfers and cashless payments have long become a daily routine. People want to make online transactions quickly and cheaply. Yet, banks set dear prices for regular transmissions and foreign remittances. Bearing this in mind, fintech providers successfully fill the niche of mobile payments. They launch money flow bypass banks and charge lower interest. 

Today, we have several types of fintech payment services.

Peer-to-peer payments organize fast remittance from person to person. Most P2P apps rest on self-made payment technologies that do not overlap with the banking ecosystem. In addition to traditional transfers, apps allow users to split bills, shop online, and much more.

Venmo is an excellent example of a mobile payment app with a social background. It displays cheer messages and emojis during the money-sharing.

 

Venmo app has a social context

Venmo app has a social context

 

International money transfers are traditionally expensive and slow. Fintech companies have solved this problem. Users no longer need to pay high rates for currency conversion. Based on blockchain technology, top money transfer apps provide high-speed and low-cost payments in every smartphone.

Ripple carries global transfers within seconds. The user-friendly interface helps track sendings from the date of dispatch to the date of receipt.

Digital wallets are nothing else but a copy of regular portfolios that you carry in your bag or pocket. Except for money, the wallet contains documents, gift cards, tickets for different events, and other papers. Users eliminate the risk of forgetting or losing valuables. They can access their things on a phone or desktop. With the mobile wallet, users make purchases or apply for certain activities online.

Perfect Money guarantees high security for money transfers. The users can accumulate funds on electronic accounts and get a monthly interest.

InsurTech

Online insurance is available 24/7. Users do not need to go to the office building and do tiresome paperwork. They can study the terms and conditions in a relaxed environment. Most often, insurtech cooperates with insurers and accumulates all available services in one place. Electronic document flow removes the need to visit the office. The user can easily select the option of interest and apply for the insurance online. In the app stores, there are both universal insur services and specific. Usually, they specialize in a particular type of insurance.

Life insurance apps are the most demanded. People want to warn events that can hugely weaken their financial situation or the situation of their family. Medical insurance apps accommodate the best healthcare programs and provide non-traditional forms of life protection.

Oscar is a good-standing company with many customers all over the world. Apart from the pure insurance program, it allows communicating with a doctor on distance and getting a refill based on remote recommendation.

Car insurance covers both traditional insurance classes and specific use cases. Users can choose the best conditions for the purchase of compulsory insurance. Also, they can pay

short-term events such as lending a friend’s vehicle or occasional driving on their car for people who do not usually drive.

Cuvva is a fast insurance service that provides temporary car insurance, trip insurance, driver’s license insurance, and others. Also, the service allows paying in installments.

Drone insurance is a new type of insurance agent apps that protects the user in case of physical injury or property damage caused by their aircraft. Also, the client can apply for compensation in case the drone is lost, damaged, or broken. To get insurance, it is necessary to confirm the safety and integrity of the drone.

Flock implements smart data-driven algorithms that estimate risks when the drone is out. The user only pays for insurance when the drone flies.

 

Flock insures drone while it flies

Flock insures drone while it flies

LendTech

Banks lend at high rates, so people are more than willing to get an affordable loan from non-bank organizations. Fintech offers fast money lending solutions. Smart Artificial Intelligence algorithms confirm the identity of the client and select the best terms of credit. Among others, lending apps analyze income prospects, credit history, refund value. Nowadays, Fintech services provide non-trivial models of credit facilities.

Peer-to-peer lending empowers one person or business to borrow from another person or business. Best p2p lending apps act as a platform that joins debtors and creditors. It charges a fee that is much lower than a bank servicing fee. As a result, both parties benefit. The borrower receives money at a lower interest rate, and the lender has a higher return compared to a bank deposit or saving.

Finding Circle is a helpful service for quick borrowing. You can register as an investor or debtor and use the app as per your needs.

Crowdfunding is a variety of P2P lending. The only difference is the number of lenders. Instead of one person, several individuals or businesses chip in for a loan for a borrower. Each lender receives a reward depending on the contributed amount.

Lending Club provides an easy way of obtaining personal loans. Enter the needed amount, specify the purpose of use, and find out your rate right away.

Loan aggregators сollect data on all available credit sources, including banking and non-banking entities. The user receives a detailed analysis of rates, terms, and other credit conditions. It is possible to apply for a loan directly in the app.

Lendio asks a few questions about your lending intents and displays the best suitable options. You can apply for a loan asap.

 

P2P lending

Lendio displays the best lending options

 

Buy now, pay later loans allow users to buy a product in an online shop instantly. Users don’t have to enter credit card details. Also, they pay nothing for credit use. App monetization comes from sharing user’s data with the original equipment manufacturer, which utilizes it for building an efficient marketing strategy.

LazyPay offers a variety of cost-free payment options. You can pay directly in an app, buy a voucher, scan QR code, or use a specific LazyPay ID.

Credit scorers help build a responsible payer reputation. Such applications tell how to manage finances to increase the credit rating. Some apps have virtual points. They are added or deducted to the user’s account, depending on the actions taken. Thus, the user can analyze how individual actions affect the potential for obtaining a loan.

Credit Karma helps define the main factors that affect your credit rating. It advises on better decisions for personal finance.

WealthTech

Wealthtech stands for wealth and technology. It means that people use technological innovations to control private money flows. AI and machine learning make a dream team of business experts. They warn against wastes and advise investments. Best personal finance apps act as a right hand at the money-market. Let’s see what categories they have.

Robo advisors use smart algorithms to guide the user in the right financial direction. Robots evaluate the business climate. Besides, they consider the human element. AI helpers study the user’s behavior in different situations. Based on the data, they learn individual wants and needs. As a result, each customer gets a personalized offer.

Personal Capital is more than just a robot. It offers a combined robot-human help. Some people feel awkward, relying only on AI. So, such a method attracts more clients.

Digital brokers analyze stock market trends and provide ready access to the scope for investment. The best investment apps open some opportunities that are available for certified investors only beyond the brokerage platform. Many services are socially oriented. They allow tracking the fields where your friends invest.

Robinhood offers exciting possibilities for fee-free trades at the stock market. Also, it supports cryptocurrency transactions.

 

Robinhood guides through smart trading

Robinhood guides through smart trading

 

Micro investment apps help people grow fair savings effortlessly. Putting aside a small amount every day, week, or month, they do not feel a shortage of money. Personal investment software is usually monetized from a fixed subscription fee.

Acorns provides easy saving without monetary sacrifice. You can enrich your commercial knowledge and raise a sizeable capital.

 

FinTech trending spheres

FinTech ecosystem

Wrap up

Fintech is one of the most promising areas of development right away. Fintech ecosystem spreads rapidly, and the apps become more and more innovative. For now, demand for business innovation exceeds supply. People need useful, reliable, and secure services. If you want to launch your fintech project, don’t hesitate. It’s just the right time. Let’s breathe life into your idea together!

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