3 Major Digital Disruptions by Fintech Innovations
In December 2015, a collaboration between KPMG and H2 ventures, Fintech Innovators published a list of 100 top fintech innovators. The unveiling of the leading innovators in the financial sector came at a time of digital disruption caused by innovations such as peer-to -peer lending and crowdfunding. Those featured on the top 100 list are the ones that are taking advantage of technology to disrupt the financial service sector. They are committed to delivering excellence and better customer experience to their target audience.
What does fintech innovation mean to the financial sector?
According to the 2015 Fintech Innovators Report, fintech innovation has brought about a funding boom with the top 100 fintech companies raising over $10 billion collectively in 2015. Worldwide, fintech financing has become three times as huge as it was three years ago, and has grown to $20 billion in 2015–66 percent more than the $12 billion invested in 2014.
The growth of fintech innovation has been novel in the last year. It has mainly focused on financial investments with respect to the development and launch of fintech solutions and products that are continually altering the way customers interact as well as how they perceive providers of financial services. There is no doubt that disruptive technology continues to change the financial sector as developing companies of fintech solutions continue to innovate.
Today, we are rapidly seeing global financial centers, such as London and New York, slowly, but surely, becoming fintech innovation centers. These cities, along with other as Sydney, are constantly offering key fintech opportunities to other financial centers. It is, therefore, critical that players in the financial sector stay abreast of fintech developments in terms of amounts being raised via fintech innovation, the rate of raising that capital, the model of fintech innovation, customer experiences and the level of disruption that fintech innovations are bringing about.
Possible Process Disruptions
As fintech advances, various processes within the financial sector are at high risk of disruption due to their strategic role in the sector. Some of these processes include:
1. Data Management
Fintech relies heavily on data management solutions that allow for integration, analysis, and management of data to produce consistent accurate information. Entrepreneurs can use data management innovations such as the Pro Business Plans website to create winning plans for their businesses. In crowdfunding, fintech innovation has been revolving around the automation of documents and the exchange of information between sponsors and issuers. Due diligence, e-signing and deal flows are some of the crowdfunding aspects that Real Estate Crowdfunding (RECF) platforms are wasting no time automating. Compliance with regulations set by the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC) is the other reason why fintech innovators are focusing on automation of data management platforms. FundAmerica is among the top realty crowdfunding platforms that has automated its data processes in line with the FINRA and SEC requirements.
2. Payment and Banking
Growth in payments using financial technology is evident with at least 25 percent of innovators featured in the top 100 fintech innovators of 2015 which focus their innovations towards transactions and currencies. Payment processes are set for disruption as fintech innovators focus on providing state-of-the-art solutions beneficial to both service providers and users. For instance, Atom Bank, a UK-based fintech innovation, allows users to complete banking transactions on their phones from anywhere in the world.
Fintech is also changing the way insurance services are being offered through data, technology and design. Oscar, one of the top ten fintech companies, is simplifying health insurance by providing an application that allows access to thousands of doctors. Users can also get their prescriptions without leaving their homes. This innovative product has a timeline that allows users to track their health history, and get rewarded for remaining active using the Misfit step tracker.
Note: This article appeared on The Soho Loft with this link http://thesoholoft.com/3-major-digital-disruptions-by-fintech-innovations-by-david-drake/ on March 23, 2016
David Drake is the Chairman of LDJ Capital, a multi-family office; Victoria Partners, a 300 family office network; LDJ Real Estate Group and Drake Hospitality Group; and The Soho Loft Media Group with divisions Victoria Global Communications,Times Impact Publications, and The Soho Loft Conferences. Reach him directly at David@LDJCapital.com.