There’s something in fintech for everyone to get excited about. From your boutique beauty store to your Wall Street war rooms, fintech has transformed what was once a dusty, legacy landscape of tired old systems to a brave new world of technology and accessibility.
Fintech is widespread and allencompasing, which means that dozens of industries are full of opportunities for inquisitive people like us. Fintech isn’t developing a new API or rolling out the next neo bank. Fintech has many layers, whether consumer banking and personal finance or vast databases and the internet of things.
Let’s take a look at what we’re interested in and why we think it’s so cool.
As a neo bank convert myself (Monzo and Starling, if you’re asking), I firmly believe that these new approaches to personal finance are helping millions of people of all ages and backgrounds find a better connection to their financial self. On an app level, digital banking is fairly straightforward. Almost frustratingly straightforward… I often ask myself why it took a bunch of startups to figure it out before the big banks.
But underneath the apps is a web of powerful digital banking tech, including artificial intelligence, advanced analytics, voice technology and much more. All of this is converging together with one common goal, and that’s invisible banking. Don’t worry, this isn’t your money disappearing. Invisible banking is the concept of removing barriers and actions to make things like payments and saving effortless, seamless and frictionless. This could be automatically moving money into pots, or establishments automatically charging you as you arrive or leave.
Fintech as a Service
It’s inevitable that various fintech technologies find their way into some kind of SaaS model. Fintech companies notoriously act flexibly and nimbly, which is in huge contrast to their traditional banking counterparts. As such, many businesses can simply embrace powerful fintech products to improve their own offering, and improve the experience of their customers. Companies like Yelp, Uber and Shopify are great examples of companies who have used FaaS to rapidly improve their own services.
Some FaaS (or BaaS – banking as a service) examples may be Apple, who are not a bank, but introduced their own credit card just a few years ago. Or Standard Chartered, who are a bank, and offer B2B customers a way to integrate their banking services with ecosystems like social media, ride-hailing businesses or digital platforms so that they can offer loads, credit cards or savings options.
APIs have played a huge part in the fintech revolution. The introduction of Open Banking in 2018 has meant that third-party services can access your banking data, which is controlled by the PSD2 regulation.
Open banking created a huge wave of competition and innovation, with almost 500 third-party providers emerging in Europe, with only four countries in the continent with no providers at all. These services tend to focus on personal finance management or finances for SMEs. Maybe it’s a finance dashboard, an auto-saving app, or some kind of pension hook-in with your bank account.
These services are almost always hooked up via APIs. A technology called OAuth is the authorisation framework, which adds protection, and companies like TrueLayer build the APIs and the infrastructure trusted by so many finance services and customers.
APIs are exciting to us because it’s what we know and it’s what we do. As APIfication allows more and more technology companies to expose their assets in a safe and reliable way, it opens up opportunities for businesses like ours, where we can build the platforms and the services for users.
Savings by Application Programming Interface (API) management tools in banking industry to reach $3.6 Billion by 2024.
IoT (Internet of Things)
It felt like only a few years ago when we were all touting IoT as the next big thing, and suddenly here we are, buying coffees with our wrists. But IoT is a lot more than wearables and personal banking. The ‘things’ in IoT could be smart bottles, tags in our vehicles, or even the smart speakers in our house. IoT is slowly but surely moving us away from the traditions of cash, cards and even contactless, to a new reality where simply being somewhere, or near something can trigger a banking action. And this extends into B2B too… with sensors, tags and wearables automatically sending a message to top up a shelf or dispatch an order.
So whilst every new banking technology is developed by a business, more often than not, for another business, fintech is very much for the people. Ultimately, the goal is to blow the dust off an industry steeped in legacy, long wait times and traditional processes, and bring up to date with the technologies and times that we are used to.
Join us in part two where we will explore databases (more exciting than it sounds), voice and insurance.
Does fintech excite you too? Maybe you need some digital expertise on a digital product with a payment gateway, or you’re looking to launch a new product or service. If we can help you do that, please get in touch.