Key trends among Fintech startups

In January 2012, Swift launched the Innotribe Startup Competition for Internet startups in order to gather leading startups and major players in the financial services market in one place. This experience was one of the first of its kind. In the following years several more similar events took place. Today fintech hakatons and various kinds of contests are held regularly all over the world. This year alone, there will be 18 fintech hackathons and start-up contests. O'Reilly analyzed 186 winners in 18 fintech contests 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 are closely following the Fintech sector, since themselves are a financial and technological service.

Ideally, the goal of any FINTECH startup is a breakthrough in the industry and the ousting of traditional financial institutions through the introduction of advanced technologies, products and design. At the same time, financial institutions focus on secure money transfer systems, payments and lending on a global scale. In fact, startups and large companies do not have to compete. It is difficult for big players to change the existing business structure from the inside, 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 start-up competitions are the place where start-up 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 were analyzed in 18 fintech contests and hackathons, including Innotribe's Startup Competition and Future of Money and Tech Startup start-up contests, Money2020 hackathons, Bankathon and BBVA Innovation and some other smaller events. The list also includes 25 fintech startups with a total value of more than $ 1 billion. Analysis of the competition winners revealed a number of trends in the financial technology market - from big data to transactions and banking.

This graph shows the share of winners in each category:

As you can see, startups involved in data processing ranked first - they account for almost 19% of all startups analyzed.
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The study revealed the following key trends:

Data analysis for better decision making

Startups are increasingly offering data analysis services as a service for comprehensive credit and transaction verification to predict the success of credit operations and determine which clients can apply for prior approval of a new loan or refinancing a student loan. And the more information about us and the world around us is collected by our devices, the more we need reliable, more advanced data analysis.

Payments and international transfers

Payments and international transfers are the heart of cash transactions. Startups in this industry focus on multiple payment methods, including credit cards and mobile apps, 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 to note is the use of a distributed accounting register, with which you can speed up international transfers.

Crediting

Startups in this category work mainly with P2P lending and crowdfunding. This category is more related to data management (Big Data). After all, companies need to understand which customers (private individuals or small businesses) are the most reliable borrowers, understand how the field of lending functions in principle, analyze data for legal expertise, evaluate the possibility of prior approval of a loan offer.

Small Business Finance Solutions

Startups from 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 contest winners. The teams of these projects have demonstrated extraordinary thinking, which is typical of creative start-ups.

• Kill Bill - an open source product, a member of the Money2020 hackathon of 2014, drew attention with a simple solution. The Kill Bill panel manages subscription payments. Every time you break into your credit card, you can easily renew your regular payments even with a new card.
• Trusting Social is a finalist in the Innotribe Startup Challenge and Future of Money and Tech. “Credit Account 2.0” is the name of its product by developers. The service uses data from modern reputation systems for a comprehensive analysis of a loan applicant, which is much better than outdated FICO estimates.
• Credibles is the 2013 Future of Money and Tech finalist. The startup combines local small companies that sell food and subscription-based crowdfunding. Credibles was created to make local food more diverse. The idea was supported by a network of supermarkets Whole Foods.
• Geolocation stock discovery - a startup from the hackathon New York FinTech offers a new way to search for investment objects based on geolocation.

The trends are obvious: as long as people and companies use data to make decisions, startups take advantage of the moment and offer new products and services. Credits and loans will not disappear anywhere, but increasingly, 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 technology to increase the speed and efficiency of translation. In the end, who wants to wait for their transfer 1-3 business days, when Bitcoin and Paypal offer instant transfer?

The financial technology market now gives startups tremendous opportunities, because the 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 about the fact that the ideas of start-ups that won the contests and hackathons this year are only a small part of what we will see in the future.

The translation is prepared for the corporate blog PayOnline , an international system for receiving and processing electronic payments.