The financial technology (fintech) market is booming. According to the Global Fintech Market Research Report, this market was worth $127.66 billion in 2018. Experts expect it to grow to $324 billion by 2026, at a compound annual growth rate (CAGR) of around twenty-five percent. Talk about an excellent industry to break into for any hard-working entrepreneurs!
There are many aspects to this hot, new market, including fintech design. In this article, we'll discuss fintech’s definition. We’ll also explore some of these newer companies’ offerings and the overall business outlook. But one thing is for sure, design is key to building trust in fintech.
Or, if you want to know what type of business your SaaS company could be, click here! For now, let’s dive into the world of fintech!
What Is Fintech?
Fintech uses technology to provide financial services, including mobile payments and peer-to-peer lending. Fintech companies are typically startups that aim to provide more efficient and convenient alternatives to traditional financial services.
Some standard services that fintech companies offer include:
- Banking: online banking, mobile banking, and payments
- Wealth management: Robo-advisors and investment apps
- Lending and payments: peer-to-peer lending and mobile payments
- Insurance: health insurance, property, and casualty insurance
- Blockchain: cryptocurrency exchanges and smart contracts
There are several reasons why people are moving away from traditional banks to fintech for these services. For example, customers can access their accounts and make transactions from anywhere.
Fintech is also often more affordable than conventional financial services. And it is more transparent than traditional financial services, providing customers with a clear picture of their finances.
Fintech start-ups usually pay serious attention to fintech design, ensuring their applications are straightforward. Good design is key to building trust in fintech, which is fundamental in an industry that involves money.
It's also important to note that unlike owning a mobile phone, few people have the privilege of owning a bank account, a significant driver behind this industry’s growth.
What Are Some of the Latest Fintech Companies?
Some of the latest fintech companies globally are in the United States. These companies have raised millions of dollars in funding and have valuations of billions of dollars.
Here is what some of them are doing:
- SoFi: A personal finance company that offers student loan refinancing, mortgages, and personal loans. Currently, the company has a market cap of $6.08 billion. In May 2019, SoFi raised over $500 million in a single funding round.
- Robinhood: A stock trading platform with no commission fees, it has raised over $5.6 billion in funding and is valued at $39 billion.
- Betterment: An online investment platform with over $33 billion in assets under management. It has raised over $435 million in funding, and it was worth $800 million in 2017.
- Acorns: A micro-investing platform that allows users to invest spare change, it has raised over $507 million in funding and has a valuation of $1.9 billion.
- Stash: A financial services platform that offers investment, banking, and retirement products. It has raised over $425 million in funding and is worth two billion dollars.
- Coinbase: A cryptocurrency exchange with over $223 billion in assets under management, it has raised above $550 million in funding, and its value is $86 billion.
The sheer sizes of these companies reflect how vast the fintech market is. Plus, these are just some of the many fintech companies out there. PayPal and Venmo are some examples, each with unique offerings and gigantic customer bases.
What Does the Future Look Like for Fintech?
The future looks bright for fintech. Experts expect the industry to continue increasing in the coming years. As we’ve already mentioned, the industry will be worth $324 billion by 2026.
One of the main reasons for this continued growth is the increasing number of unbanked or underbanked people. According to a report from the World Bank, 1.7 billion adults worldwide do not have a bank account.
Fintech companies have an extraordinary opportunity to provide these people with access to financial services. In addition, the increasing adoption of mobile devices and mobile commerce is also driving growth in the fintech industry.
So, check out fintech today! It’s never too soon to get into the next big thing.