Despite the ongoing economic and political turmoil, FinTech companies saw an impressive $135.7 billion global investment in 2019. The Americas alone had investments for $64.2 billion; this comes as no surprise, given the U.S. is the global leader in terms of FinTech. These numbers show one thing: FinTech is treading hard.
The financial industry has been developing innovations at a pace not seen in decades. The fact that the rules of the game are changing means that there is room for new players. At Koombea, FinTech is one of our core industries for web and mobile app development. For this reason, we would like to share with you examples of some of the companies that we consider topping the charts through their innovative business models, user-centered experience, and well-crafted apps.
Like the squirrel that saves food for winter, Acorns wants to help its users save their money. Acorns is a personal finance management service that focuses on low- and middle-income households rather than on wealthy ones. In particular, it addresses those individuals who have never had the option to save or invest before and therefore have no knowledge of how to perform these activities. It seeks to help its users by introducing responsible money management principles; it offers valuable educational content related to investing, retirement, and saving, to mention a few.
As part of its business strategy, Acorns has partnered with some important brands in order to help its users manage their finances. Its partnership with PayPal has helped the company increase its users while consolidating itself as a major player in the new FinTech environment.
In a world where finance is usually associated with predatory practices, Acorns stands out as what the new integral FinTech company can look like when users’ well-being is a priority.
Cryptocurrencies are here to stay, and Coinbase knows this. It is one of the fastest-growing currency wallet platforms, allowing its users to manage transactions and perform payment processing of some of the most popular digital currencies like Bitcoin and Ethereum.
Coinbase’s philosophy resembles that of the internet during its first years: the quest for a decentralized system where no country or entity dictates the rules. It is no surprise then that its mission is to help create an open financial system for everyone, a pretty ambitious goal in a market that already shows many competitors and where uncertainty regarding regulatory matters is a major issue.
Real estate has become an attractive industry for FinTech to innovate. Opendoor has been part of this trend by developing a platform that helps its users simplify the process of buying and selling homes. Its ultimate goal is to empower individuals with the freedom to move.
On the platform, users can put their homes for sale, buy a home, or trade in theirs in exchange for another one. Opendoor helps users establish the price, identify associated fees, and solve other questions that might pop up along the way.
It currently operates in twenty cities across the U.S and was recognized as the most innovative company by Inman, one of the industry’s leading sources of real estate information.
One of the major advantages of FinTech is that it is available to anyone with a computer or mobile device. That is why Plaid’s goal of seeking the democratization of financial services is not a crazy idea.
Through its various products, Plaid offers solutions that connect payment and personal finance mobile banking apps to consumers’ bank accounts. This allows users to manage their portfolios and perform operations like money transfers and tracking funds in an easy and organized manner, even if they have various bank accounts.
Plaid has developed a set of developer-friendly APIs that allow the integration of various platforms in order to process information and deliver a great user experience.
Root Insurance Company
The insurance world can be nasty if one does not know how to move around. That probably explains why Root Insurance has been such a success. With its easy-to-use app and its innovative business model, it is revolutionizing the auto insurance industry by offering alternative pricing methods.
By harnessing the power of IoT data and cloud computing through their app, Root Insurance starts to qualify customers according to their driving skills. They focus on measuring a number of variables that allow the app to set insurance rates based on users’ actual behavior rather than on fringe metrics. By guaranteeing that only safe drivers are insured, the company can offer competitive rates.
It is not uncommon to hear tech companies seek to change the status quo. However hard this may be, Stash is definitely up for the challenge. The company offers various plans that help users achieve their financial goals by monitoring their performance. Additionally, through the practice of building habits, Stash helps users make financial progress.
This investment management platform helps users perform investments, manage their money as if it were an online bank, develop healthy financial habits, and learn about how the financial system works.
FinTech Startups: New Challenges and Opportunities
As FinTech shakes the foundations of traditional businesses, many challenges and opportunities in the Fintech space will surely arise. Companies will face difficulties related to data privacy and security. Although the sky’s the limit, what a company can or cannot do with data depends ultimately on the laws governing data collection and use. Also, the regulation of different industries becomes extremely important. It might become a burden if excessive rules are established, and it might leave customers unprotected if the right measures are not in place.
The good thing is that, as the differences between financial and non-financial services disappear, there are also many opportunities to improve products and services. One major trend that will surely help startups grow is pairing up with big tech. As companies like Google, Apple, Facebook, and Amazon restrain themselves from incursions in financial activities, due to the complexities this implies, FinTech companies have an opportunity to provide these services.
FinTech companies that learn to use the power of IoT and develop great apps will surely have an advantage over their competitors. In a fast-changing world, it becomes necessary to constantly innovate and understand customers in order to be one step ahead.
Do you want to challenge the status quo? Let us help you build that great FinTech app. Contact us for more information!