While many people, young and old, will be aware that fintech exists and is probably something to do with Paypal and online banking apps, they might not be aware of the range of services that fintech can now provide for its customers. Below is a look at the variety of financial technology that can be used from a smart phone or laptop.
Finch is an Australian company founded in 2017. To quote their website the goal of Finch is:
“To better understand our customers, we developed proprietary machine learning models and matching algorithms to analyse behavioural patterns in transaction data. In solving this challenge for ourselves, we discovered our potential to solve it for the financial industry at large, with what is now known as the FinchXP data intelligence platform.”
Essentially, the app follows and learns from the user’s financial actions and uses this data to offer personalised financial products for the customer. It also allows you to split bills with your friends.
Emma is a UK based company that has made an app that consolidates all the user’s accounts into one display showing your current account and saving accounts, as well as your monthly bills and breakdown of expenses. It even roots out any monthly subscriptions that you might have forgotten about. As with Finch it is a financial tool that seeks to draw information together to allow users to make better informed financial decisions.
This is an app which has championed the working class of the USA. It is called ‘Dave’ after the story of David and Goliath, the original story of the underdog taking on a massively advantaged opponent. The app provides interest free payments to cover the days between pay checks when money is scarce. It also gives overdraft protection.
This is a neat app that lets the user set up instant car insurance that starts at 1 hour. If you need to borrow a friend’s car for a couple of hours than Cuvva has you covered. And no problem with extending the cover if you’re stuck in traffic. Moreover, your driving doesn’t impact on your friend’s no claims bonus. For those that subscribe they can use the app to monitor their driving and get rewards for safe driving with discounts on annual car insurance rates.
This is a US based company that has over 100 million users in America, Canada and the UK. It gives free credit score ratings and allows for users to see their chances of approval for loans, credit cards etc. without impacting their credit score. It also matches its users with the most suitable credit offers on the market.
Braintree offers important financial technology for website owners looking to take online payments for goods and services. It integrates with PayPal, Venmo (in USA) and credit cards to provide the same painless payment processing that big tech giants like Amazon and Ebay enjoy. This fintech opens up e-commerce possibilities for millions of fledgling businesses. So far, Braintree offers services in 45 countries over 130 currencies making it an impressive piece of global fintech.
Lemonade is a US company that is a licensed insurance provider. It offers cheap home insurance by replacing brokers with bots and machine learning. It is paperless and gives immediate decisions. Lemonade uses its gains from underwriting home insurance for charitable causes. Low fees and a commitment to helping society shows how fintech can be a social good.
Penfold is a UK company that provides pension plans to nearly 4 million freelancers in the UK. Freelancers are not in the state pension scheme and so have to make their own provisions for after their working life. This smartphone app monitors the user’s incomings and outgoings and makes affordable payments to build a pension nest egg.
This is a piece of fintech that has quickly captured a large share of the stock broking services market. Before you had to pay a broker a commission or a retainer to access the ability to buy and sell shares. This mobile app allows users to buy and sell shares for zero fees. Robinhood has broken the monopoly that banks and trading houses used to have as intermediaries collecting fees for buying and selling shares on behalf of their clients. Stock trading is no longer just for the wealthy thanks to Robinhood.
This is a famous app that came from Israel. It is an app for the phone or laptop that allows users to buy and sell shares and cryptocurrencies using automation for low fees. This gives users access to a wide range of assets for investment. You can buy just a few dollars’ worth of Amazon shares or a fraction of a bitcoin. The app has a handy function that allows you to copy the strategies of the most successful investors using the app.
The main thrust of fintech as seen above is to provide cheap, real-time banking services. Often fintech apps target those normally excluded from banking facilities. This is because of a lack of financial history or suitable means of ID. Fintech has pioneered many clever alternatives to establish identity and remove barriers to financial services. These barriers often prevent the world’s poorest from having access to cheap loans, insurance and other financial services.
Another aspect of fintech is that it monitors user activity in real time and uses AI and machine learning to learn about the user and suggest suitable products. In the case of Cuvva, smartphone technology is used to monitor location and movement; it is also used to provide automated assessments about driving skills.
While fintech at present has offerings that cluster around simplifying paying, saving and applying for loans and insurance the potential for this technology to disrupt traditional financial sectors is huge. With the advent of custodial wallets, Web 3.0 and blockchain technology we are seeing a new generation of fintech that is more secure, more decentralised, more affordable and potentially more profound in its impact on society.