Most Promising FinTech Start-ups in 2017

Technology has created the opportunity for innovation to occur in many different types of industries. Consumers now easily access books through Amazon, media through YouTube and television through Netflix. Prior to the 21^st century, it was expensive being a consumer. It was also time consuming and even impossible in many cases. There was no easy access to books, and even something as simple as watching a movie was a very expensive hobby.

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The Internet forever changed the way we consume things. You can easily purchase a rare book, you are able to access quality content from the best universities in the world for free and you can watch your favorite television show as often as you want for less than $10 a month.

The time has now arrived and the financial industry is being revolutionized through innovation as well. This industry is in the midst of a revolution, and tech industries are steadily taking away business from the more traditional financial institutions like banks. This is a trend that is here to stay.

Fintech customers are also providing free marketing through word of mouth. These customers are not hesitating to inform their family and friends about the improved user experience these tech companies are providing.

What is ‘FinTech’?

FinTech is a term that is used to describe Financial Technology. These types of companies are organizations that help to leverage technology in order to provide more efficient financial services for B2B and B2C.

FinTech is really an umbrella term that can refer to several types of companies. However, there is one common factor that all of these businesses have, and that is a niche strategy.

Every one of these FinTech companies is quietly taking over tiny segments of the financial industry. They are slowly dissolving the way that consumers bank, invest and obtain finance.

How Did the Revolution of FinTech Occur?

Lenders who have been in the financial services industry for years always assumed that complicated laws and regulations would protect their industry from the Internet taking over. After the burst of the Dot com bubble, there were only a small number of start-ups that were present in the financial industry.

Most major banks were not concerned, and they did not rush to embrace the shift of paradigm occurring because of the Internet. These traditional banking institutions did not have any idea that the mixture of excellent timing, increased customer demand, innovative technology and talent would have led to the FinTech revolution that is upon us. This same revolution is occurring in other sectors as well.

Why is the Timing Right for FinTech Ventures?

After 2008, a new era was defined in finance. The inefficiency of the financial system, especially banking, was revealed to everyone. The tech industry instantly recognized that the financial industry was indeed broken. As a result, start-ups began to seize the opportunities that would help them improve certain elements of the system.

The founders of these tech companies started to imagine how their companies could create a disruption within the financial services the traditional banks offered. These tech companies also took advantage of the ecosystem at the time to easily start these new businesses.

So, what are some of the most helpful FinTech companies that are making their mark in the industry, and which ones should you keep track of?

CrediFi

FinTech ventures are helping to reshape every part of the finance industry. There is one particular sector that is being reshaped by solutions in innovation technology. This sector is CRE, or Commercial Real Estate. There is an acute need for better clarity in Commercial Real Estate because the lack of vital information that was part of the reason the financial industry collapsed during the recession.

In fact, many have declared that the bankruptcy of the financial giant, Lehman Brothers, will always be synonymous with the destruction of wealth and fiscal crisis.

There are now more regulatory restrictions for lenders, and CrediFi is working to solve the apparent lack of transparency surrounding important financial information in the CRE sector.

CrediFi is a large data platform that helps to provide detailed loan information that is unknown in the market. This FinTech company gathers data on loans on commercial properties that are non-scrutinized. The company also provides property details, market level reporting and data on tenants. This particular data is considered the life blood of Commercial Real Estate. The information is then redistributed in a more digestible form.

Transfer Wise

It should be a relatively simple and painless process to make a transfer between two accounts. This process should also be inexpensive because of the modern technology. However, the transferring of money between two accounts, even if you own both accounts, can be challenging and expensive. It can be even more of a frustrating process if the transfer is occurring across borders.

Transfer Wise is a FinTech company that uses P2P technology for money transfers. Peer-to-peer technology is used to help simplify fund transfers while also charging much less than banks do to transfer money overseas. This P2P process bypasses the red tape that is usually included with cross border transfers by matching any currency needs. This means that any grey or hidden charges are significantly reduced, and consumers can experience savings equaled to 90 percent when they are compared to the more traditional types of wire services.

Transfer Wise has now entered into the US financial market after receiving $58M in financing from investors including Sir Richard Branson.

BillGuard

Founded in 2010, BillGuard was developed to act as an alert system for consumers who were being charged hidden fees by the issuers of their credit and bank cards. The company received over $3M in funding based only on the strength of their product. Since 2010, the company has not only grown, but it has also received $10M in additional funding to become a comprehensive service provider offering a fraud monitoring and spending tracker.

With Android and iOS apps, users can receive immediate warnings to their mobile devices when something does not look correct with their accounts. This allows users to feel less guilty if they do not diligently review their banking and credit card statements every month. Currently, BillGuard has raised red flags totalling $60M in suspicious transactions.

Insuranks

With people becoming more cost conscious than ever, Insuranks is a platform that is designed to help insurance consumers get the best premium rates while simplifying the experience. Insuranks is an insurtech startup that lets consumers get real time quotes, offers and discounts on all kinds of insurance products. Users can compare everything from auto and health insurance to life insurance and pet insurance through the easy to use platform.

Insuranks isn’t a comparison website like the others though. The website allows consumers to review and rank agents and companies that they got covered with, enabling both the insurance companies, agents and other consumers to receive feedback in real time, and ultimately making the decision of which company and agent to get a policy out with easier and more simple than ever before. 

OnDeck

If money truly talks, then OnDeck has created a successful start-up. Many investors have put money into this FinTech start-up, which was created to be an alternative lender for small businesses. OnDeck has raised over $100M for equity financing and over $200 million for debt.

The company has a simple mission statement. It wants to offer small business owners alternatives to traditional lenders when seeking a loan. This has resulted in small businesses flocking to the FinTech start-up because proprietary methods are used to evaluate the creditworthiness of potential clients instead of the personal credit check that traditional lenders like banks use. The added bonus? OnDeck can process loans within one day, while it may take a bank several weeks to close on a loan.

Stripe

As if the list of successes for Stripe could not grow any longer, the start-up recently announced that it is becoming an Apple Pay partner. Stripe is already currently supporting the e-commerce and mobile payments for Alibaba, Twitter and other start-ups. Stripe is an attractive payment processor because the code is simple to manipulate and easily available. Founded in 2009 by college kids, the start-up has a valuation of almost $2 billion.

AstroPay

Did you know that credit cards are either underused or not used at all in certain parts of the world? The emerging middle class in countries like China and Brazil now have the option of using AstroPay. This is one of the largest payment services providers offering cross border access in both China and Latin America.

It is a payment solution targeted at reducing fraud to enable merchants the ability to accept payments safely from individuals who reside in areas that have been flagged as high fraud areas.

AstroPay recently completed a program that will hopefully create a successful way for millions of Chinese residents who do not have access to credit cards the opportunity to purchase goods internationally, including goods from the United States. This will have the potential to cause a reverse trade flow that could be quite interesting.

Square

One of the FinTech start-ups that has caused the most disruption in the financial sector in recent years is Square. It has managed to accomplish every goal that FinTech ventures have. The company has provided a simple solution for a problem that is widespread.

For Square, the problem was the expense and hassle of credit card payment processing at POS (Point of Sale). A mobile compatible card reader can be obtained from Square by anyone. After that, all is required to begin accepting payments is an account and the app downloaded to a mobile device. Although the transaction fees are a little more expensive than the market rate, the flexibility of the payment processor has made it very popular.

It is official, the revolution of FinTech is here. The question remains -  how fast will they go and how far will they go? The other question is how soon before other institutions begin to wake up?