Smart money. Six major financial technologies this year
In 2017, the total investment in fintech – “smart” online services that help ordinary users and professional market participants manage finances – amounted to $ 27.4 billion, according to Accenture consulting company. This is 18% more than in 2016.
According to the compilers of the list of the most promising fintech projects of The Forbes Fintech 50 – 2018, in the US financial services are already formidable rivals to the local banking sector with a market capitalization of $ 8.5 trillion. Fintech not only changes the behavior of consumers in all areas of personal finance from saving capital to borrowing or accumulating it, but also transforms the financial market itself. In this industry, there are more and more solutions designed for professional participants – banks, investment companies, hedge funds. These developments help them analyze data, calculate the situation on the stock exchange, and choose strategies for investments.
According to Stanislav Kolesnichenko, Director of the Skolkovo-Venture Investment Ecosystem Development, in the coming years, the sphere of fintech will undergo drastic changes. The industry has grown rapidly over the past five years, more than one “unicorn” has appeared on international markets (a company with a capitalization of over $ 1 billion), but further growth has come up against legislative restrictions and competitive pressure from traditional banks, the expert explains.
“Fintech is now becoming more and more technological and is moving toward b2b products,” Kolesnichenko emphasizes. He identifies several fintech trends that can be observed in the next couple of years both in the world and in Russia: the penetration of blockchain technologies, the development of scoring models using big data and artificial intelligence, various technologies for remote user identification, automation of fraud detection mechanisms.
Konstantin Molchanov, head of the project support and development department of the Finam investment company, agrees with him. He notes that recent years have been marked by rapid growth in consumer fintech. Now most of the niches in this market are occupied, so developers will have to concentrate on business solutions. The most promising direction Molchanov considers the development of user identification systems. “This is a very topical issue both in Russia and in the world,” the expert says.
The Forbes Fintech 50 allows you to understand how the world of fintech is changing and what ideas in this market will be in demand in the coming years. The list includes Internet services operating in the US market or influencing it, including foreign origin, with the exception of public companies. So, what financial technology is the future?
Fast investments and robotic advisors
A significant part of the rating’s defendants – eight services – falls on platforms and mobile applications for simple investments that allow you to buy securities or ready-made portfolios from exchange-traded funds (ETFs) in a few clicks.
Investment service Robinhood, among investors of which the Russian billionaire Yuri Milner F 31 and actors Jared Leto and Ashton Kutcher, makes it possible to invest in popular cryptocurrencies Bitcoin and Ethereum, and the Fundrise platform – in real estate.
The principle of operation is quite simple: the user registers in the application, associates it with a brokerage and bank account and invests in the tools of interest to him by simply pressing the Buy button. This distinguishes services for mobile investments from traditional trading terminals like QIUK or MetaTrader, which have a much more complex interface.
Among the persons on the list there is also a platform with artificial intelligence that can independently determine the user’s risk profile, select an investment strategy for him based on the same ETFs and systematically bring it to life – the Betterment robo-adviser. The Acorns application is knocked out a bit, which rounds each spent amount from a user’s credit or debit card to the nearest dollar and invests additional funds in a portfolio of low-cost ETFs, as well as a service for investing in Circle Up venture projects.
Applications: Acorns, Betterment, Cadre, CircleUp, Ellevest, Fundrise, iCapital Network, Robinhood
Big data to search for fraudsters and profitable assets
The audience of fintech developers is not limited to private investors: more and more solutions for professional participants in the financial industry are appearing on the market. This year, The Forbes Fintech 50 immediately included ten such startups.
As a rule, these are services for the analysis of big data and massive online commerce. Banks need working with Big Data in order to quickly examine a large amount of information and identify fraud or calculate operational risks. Hedge funds need this technology to determine market entry points and manage positions.