Financial technology is on the rise. Personal and app banking have never been more popular, and not just among the populace. More and more investors are looking towards fintech startups for their next big ventures. But why is this, and what does 2020 data tell us?
Fast Facts on Fintech Startups
Before we dig deep into the hows and whys, it is worth crunching a few numbers. Fintech startups worldwide are a huge deal right now – to the extent that, already, 24 different ventures in the industry are trading as unicorns.
This emerges on the back of global funding data, too. 2019 reportedly saw fintech venture investments spike at more than $135 billion worldwide. Add this to statistics that show more than 80% of finance companies keen to reach out to fintech in the next few years, and it is clear that the phenomenon is expanding.
Alongside telecare, fintech is quickly emerging as an everyday tech for many people. It is simply easy to pick up a smartphone, launch an app, and check a credit card statement.
This ease of use – and continuing financial innovations – are clear indicators as to why the industry is reportedly worth a staggering $4.7 trillion.
Innovations Persist, as Do Demands
Reasons for fintech spiking so highly in terms of funding are reasonably clear. Over three-quarters of established finance bodies now want to embrace fintech to retain customers. On top of this, around 50% of people banking at all purely use apps and fintech staples.
What’s more, innovations are continuing to emerge. Bank statements and payment apps are nothing new. However, startups eyeing new ways to help people save money, invest in the stock market, and give money to charitable causes, are all likely to be picking up considerable interest.
Big name SMEs such as PitchBook provide equity market insight to investors and everyday users. Others, such as Morningstar, help to provide traders with clearer access to market research. Crucially, as with starter company innovation across the board, the focus is on simplification.
As demand for fintech innovation increases, big finance is starting to wake up more and more. Data shows that some institutions are afraid they will lose ground on digital competition. ‘If you can’t beat them, join them,’ as savvier tech adopters might advise.
The Future of Fintech
SMEs and ventures focusing on Fintech are likely to see considerable interest for many more years to come. While markets may be shaky at times, it is always pleasing to have access to a simple app to manage your money and investments. If there is a way to simplify payments and investments, you can be sure a venture will find it.
VCs and investors, too, will continue to use directories such as Fundz to find the most appealing fintech startup companies. As money management gets simpler, innovations get more exciting. Big data is big money – and the shrewder startups know that this is a lucrative road to head down.