SIX fintech sectors transforming the financial industry
Fintech - short for financial technology, is transforming the world through numerous avenues encompassing all areas of the global economy. From digital payments and lending to retail, banking, cryptocurrency, and more. We list the top six fintech sectors driving change and innovation in the financial world.
Lending
Leading fintech lenders: Klarna, Affirm, Funding Circle, LendingClub
The lending sector has become increasingly visible over the past decade as innovation and technology have driven disruption that has put the customer at the heart of the lending space. Credit cards and traditional-style bank loans have been replaced by BNPL, peer-to-peer financing, payday loans, and more. Credit cards also going digital - cutting out the need for customers to carry cards in their wallets. Instead, the transactions can be carried out via the card’s mobile app.
Personal Finance
Leading personal finance providers: Mint, Credit Karma, WalletHub, NerdWallet.
Personal finance fintech offers a vast array of services that use state-of-the-art technology to assess customers' needs and provide them with products that will streamline and grow their finances. For example, Mint’s goal is to provide information that educates users in making financial decisions. The fintech offers reviews and comparisons of different financial products, including investment, insurance, loans, banking, and credit cards.
Digital banks
Leading digital banks: Nubank, Revolut, N26, Monzo.
Digital banking has transformed the way customers interact with their finances because they offer all products and services online, and can action requests for account changes, deposits, loans, and crypto services in real-time. Their processes are streamlined and because they operate either without or with minimal branches, they can also pass that saving on to their customers. Digital banks are also thriving because they offer super apps that cater to customer needs and demands with agile and streamlined services.
Centralised crypto exchanges
Leading cryptocurrency exchanges: Binance, Kraken, KuCoin, Coinbase
Regulated, centralised crypto exchanges provide digital currency investors with a more secure platform, through which, numerous cryptocurrencies can be bought and sold. Decentralised finance is still an unstable environment vulnerable to numerous scams and fraud rackets. However, as public and private blockchain networks grow, their reach is expanding into mainstream finance.
Institutional investors
Leading fintech investment companies: BlackRock, Vanguard Asset Management, J.P. Morgan Asset Management, BNY Mellon Investment Management
Institutional investors specialise in wealth management. They invest capital on behalf of their customers. Services include the buying the selling of stocks or securities, bonds, mutual funds, and investment funds. They have extensive market research knowledge and today, harness the latest technologies to read the markets and assess behaviours through AI data science.
Digital payments
Leading digital payments providers: PayPal, Stripe, Adyen, Wise
The digital payments space has expanded massively over the past three years. The pandemic resulted in more customers demanding contactless services, while commercial enterprises have also streamlined their transactions. Faster, safer, lower-cost payments are also increasingly customer friendly, with increasing options for mobile payments, QR code payments, cross-border transactions, and blockchain technology transactions. The increase in the number of remittance companies is also reflective of an increasingly mobile global population that requires seamless transactional services across continents.