With the arrival of the "FinTech revolution," a new generation of startups is emerging, connecting financial services with the latest innovations in computer science. By bringing in machine learning, big data and cloud computing, they are stirring up the traditional banking sector with concepts like peer-to-peer lending, crowdfunding or wireless payments. Though originally only applied to technology at the back-end of the established consumer and commercial financial institutions, the buzzword fintech has expanded in the recent years to all technological novelties in the financial sector and refers to new applications, procedures, products or business models that are served via the Internet. Fintech solutions include mobile payment solutions, telematics-based insurances that calculate fees based on customer behavior in the area of non-life insurance, personal finance management systems or peer-to-peer lending and come in B2B (Business to Business), B2C (Business to Customer) and C2C (Customer to Customer) varieties. Several factors help explain the development of fintech as a growth sector.
From paying for a cup of coffee with your iPhone to handling complex financial data at work, you deal with fintech every day. The explosive growth of the technology, that we have been witnessing recently, triggered major changes in every aspect of our life, especially such fundamental one as finance. With $31.6 billion of investment in the US, with additional $18.1 billion invested globally over the last five years, fintech is currently one of the hottest technology sectors. Both accomplished players like Intuit, PayPal, or Square, and disruptive startups like Plaid, Kabbage or Robinhood are reshaping financial industry. Fintech market is far from being saturated.
The financial industry exploded in 2015, with fintech companies raking in an impressive 7.6 billion in investments – a considerable increase from 4.7 billion in 2014 and 1.5 billion in 2013. All eyes are on fintech as we advance through 2016. We're already seeing some exciting patterns emerging for the future – closer links between banks and alternative lenders and the push for open APIs, to name a few. Last year was widely considered as the year of the blockchain app. "The blockchain infrastructure was reinforced in 2015, with strengthening involving mining, exchanges, wallets and processors.