I've recently been talking to people about my new “FinTech” venture and I’ve discovered that this term isn’t very well known outside the startup community. In the last few years there have been a number of new terms popping up all over the place. BioTech, FinTech, MedTech, etc…
So, What is FinTech*?*
The word FinTech is simply a contraction of the words “Finance” and “Technology”. FinTech is essentially a new industry sector that is applying technology solutions to improve financial activities. For example, the use of computer applications and other technology to support banking and other financial services.
FinTech is essentially a new industry sector that is applying technology solutions to improve financial activities
There are a huge number of startups entering this space and global investment in financial technology (FinTech) has increased more than 3,300% from $930 million in 2008 to more than $31 billion in 2017. These companies are providing products such as mobile banking via smartphones, disintermediation, and improved user experience to finance workers.
There are thousands of companies now operating in this industry across a wide range of market segments: consumer, corporate, education. I’ve selected a few well known ones to offer an example of the diversity of innovation in this space.
Probably one of the best known examples of a successful FinTech business is that of cloud-based accounting solution Xero. Founded in 2006 in New Zealand, Xero has been steadily growing through capital raising and acquisitions. This web-based solution offers a number of benefits that the traditional accounting packages were unable to provide such as real-time access globally, and links to online banking.
Another area where FinTech is turning heads is in the corporate finance space through process automation, process simplification and disintermediation. Prospa provides online digital loan approvals for small businesses, their point of difference is that by being a digital-first solution they are able to offer flexibility the traditional lenders are unable to provide. One example of this is their product targeting hospitality businesses. This product provides a daily repayment option which helps ease cashflow stress for this style of business.
PocketBook is a Sydney-based free budget planner and personal finance application that helps individuals manage budgets, track spending and manage bills. It offers a web-based and mobile experience so that users can keep track of their spending any time they desire.
Finally, the product we’ve been working on for the last year or so. FairDealFX is FinTech solution that enables Australian businesses to accurately price their foreign exchange derivatives. Until now these businesses have been at a great disadvantage when dealing with their banks. FairDealFX provides a simple web-based interface to allow the user to negotiate a fair market rate with their bank.