FINTECH is on the rise this 2017.
Fintech startups have created financial products that allow customers to enjoy easy payment processes, money transfers, and financial advice via a site or an app. The best part? Since transactions are done online, they can be processed and finished in mere minutes!
Gone are the days when you had to go to the bank, talk to a financial advisor or wait a day to receive money. With fintech, all you need is to avail of the right tools to make your life easier.
In fact, the numbers show that the industry’s growth is far from over. According to an Accenture study, the industry acquired $5.4 billion in investments in the first quarter of 2016. Another study by Statista estimates that banks in North America will spend about $19 billion in financial technologies. This level of growth is a huge leap, but it’s not surprising.
In recent years, fintech startups have created services that can change the way you do business.
Interested to find out what these startups and services are? In this article, we’ll talk about Best Fintech Startups you need to watch out for this 2017.
Best Fintech Startups
Tilt, recently acquired by AirBnB, introduces an easy way for groups to pool money together for any activity.
It’s a standout because it’s only fintech startup that’s solely focused on making casual social gatherings, group activities and get-together’s possible. Unlike Facebook where everyone’s gathered online, Tilt brings people together to enjoy real events in the real world.
Let’s say, you and your friends want to go overseas, organize a party or enjoy a BBQ. With Tilt, you don’t need to personally chase down them to get financial contributions. The only thing you’ll need is the app.
This is how it works.
First, you make a page on Tilt, send it out to a group, then start collecting money.
Now, what if you don’t get enough funding? Don’t worry!
You and your friends aren’t charged until you’ve reached the target amount. Plus, you can also keep collecting money even after you’ve reached your original target.
Now, how cool is that?
Tilt has raised $67 million and is currently valued at $500 million.
Metromile is the only company that offers pay-per-mile auto insurance. It lets you pay car insurance based on the amount of miles you drive each week.
Its pay-per-mile service was inspired by the problems with traditional car insurance. Some drivers consume lower than 200 miles each week, yet they have to pay the same amount of insurance as high-mileage drivers.
This is not fair.
If you barely use your car, then why do you need to pay the same amount of insurance as everyone else?
This is where Metromile comes in.
Their insurance plan allows low-mileage drivers to be charged as low as $35 per month, plus 5 cents per mile. This means that the average low-mileage driver can save up to $500 a year!
So, how does Metromile measure mileage?
A device called ‘Pulse’ is plugged into the car. Not only does it measure mileage, but it also powers the driving app. Metromile’s app can help you locate your car, avoid street sweeping tickets and optimize fuel efficiency.
Now, what if you get into an accident? No worries! Metromile has a reliable claims service that is available 24/7.
But it does not end there.
The company has partnered with Uber to create a specialized plan for the personal and commercial coverage of high-mileage drivers.
Last year, it has raised $200 million in funding. Since it’s the only startup that has successfully implemented a pay-per-mile auto insurance, we’ve included it on this list.
WorldRemit allows users to safely send money abroad. It has the ability to conduct money transfer in 125 countries.
Its charm is in its app, which is simple and easy to use.
To send money in the app, first you choose a country then you choose how to send the money. You can choose to send via bank deposits (money is sent to a bank account), cash pickup (receivers gets money from collection points), mobile money (money is sent a mobile account) and airtime (money is used to acquire talk-time or data allowance for a receiver’s phone). Next, you indicate the amount of money to be sent, the recipient’s’ details and press pay.
The transfer is done in mere minutes with a low transaction fee.
Last year, the company raised $100 million and acquired a valuation of $500 million. The fact that it conducts about 400,000 money transfers each month in 125 countries, makes it one of the most successful money transfer startups in the world.
iZetlle believes big things start small. Consistent with its belief, the European startup helps small business owners manage their business.
Since it was founded in 2010, the startup has helped users grow to nearly 5x the average!
How it does the job?
The user-friendly point-of-sale app comes with a card reader that works with a smartphone or tablet. This way, business owners can conduct financial transaction anytime and anywhere.
The app also offers an impressive array of financial services that are useful for managing a business. Users can manage their product library, keep track of sales and email receipts to customers. These services are done without a startup cost, contract or a monthly fee.
But what truly makes iZettle a standout in this list is the fact that it requires no startup costs, no contract fees, and no monthly fees.
Now, that is amazing.
In a nutshell, iZettle makes it easy to for users to run and grow their business.
Last year, it raised €60 million Euros and it achieved a valuation of $500 million. Its services are available in 10 European countries, including Brazil and Mexico.
Still not convinced that bitcoin is the future? Well, I don’t blame you.
It’s not a common currency.
It’s hard to transact and trade with.
That is, until now…
Coinify allows users to accept blockchain and bitcoin payments. This means that can users can purchase bitcoin and accept bitcoin payments directly from their bank account.
But how do you accept bitcoin payments without a bitcoin?
Coinify has all the answers.
The app allows users to accept bitcoin payments and get the payout in the form of their local currency.
Coinify was founded in 2014. Since then, it has raised $4 million.
While the funding it received is small compared to older fintech startups, it’s poised to become the next big thing in the industry. After all, it’s one one of the only startups that have successfully managed to make bitcoin payments work in any financial transaction.
Stockspot is an online investment advisor that gives users access to low fee and hassle-free investing.
Its service is inspired by the problem with traditional advisers. Since advisers work with organizations that have their own agenda, investors aren’t sure whether or not the recommendations they receive are for their best interests.
More importantly, most advisors claim that they can beat the market return.
However, the truth is only 3 out of 10 succeed. That is after you include their fees.
Stockspot eliminates all these issues by introducing an online investment advisor that’s paperless, transparent with no hidden agenda.
In order to give the proper investment advice, the app asks questions to determine the risk profile and investment timeframe of its users. Then, it recommends a portfolio that not only matches a user’s circumstance but is also based on a broad range of shares and bonds. Once users invest, they can view their portfolio online and even share the data with their accountant.
The best part?
It costs less than half of the amount paid for an average fund manager.
Stockspot’s service is definitely a huge leap for the fintech industry.
What makes it a standout in the industry is its online investment advisor. The advisor’s algorithm has the ability to examine the investment behaviors of its customers and use it to improve their financial decisions.
Since the Australian-based startup was founded last 2015, it has raised $1.25 Million.
TransferWise is a smart way to send money abroad.
Traditional banks claim that their transactions are free with 0% commission. In reality, they add a markup to the exchange rate.
In short, your money isn’t converted to the real exchange rate.
Often, banks add a markup to overcharge you. In fact, you pay $50 for every $1000 you transfer.
Now, that is a big amount of money!
With Transferwise, this isn’t a problem. It makes use of the real exchange rate and it has no hidden charges.
It’s 8x cheaper and 5x faster than a bank.
How does it work? It makes use of a peer-to-peer approach.
Let’s say, you’re located in the United States and you want to send money to Germany. The payment is sent over to Transferwise’s US account, while Transferwise’s German account sends money to the recipient. Technically, the money does not cross any borders, which makes their service infinitely cheaper.
Transferwise’s ability to bypass borders when sending out money has changed the way people send money across the world. Not only is their idea truly unique in the industry, but it’s also profitable in the long-term. This makes it one of the top startups to watch out for this 2017.
Transferwise is definitely changing the way money is transferred. Not surprisingly, it has a total funding of $116 million and a valuation of $1.1 billion.
The service is currently available in 44 countries.
8. IdentityMind Global
IdentityMind Global is a fintech startup that serves financial service firms, fintech leaders, and bitcoin marketplaces. It’s best known for its eDNA technology that allows users to evaluate the digital identity of individuals who they’re transacting with.
A digital identity is a set of attributes that consists of email, phone, passport, fingerprint, payment and IP geolocation. The digital identity evolves over time. As users transact with other users, their eDna grows in real-time.
Users with a trusted digital identities have a clean behavior across their financial transaction. They have no ties to non-trusted identities. On the other hand, digital identities of fraudsters and criminals change quickly making them easy to identify.
With the eDna technology, IdentityMind Global enables users to transact only with people they can trust.
Last year, the company has raised $12 million. Since its the pioneer of eDNA technology, the startup is definitely a standout in the fintech industry.
Monzo is the bank of the future. It aims to become the Facebook of banking and acquire a billion users worldwide.
The vision seems daunting, but certainly not impossible.
Monzo’s service comes with a prepaid MasterCard with a companion app. What’s great about the app is that it provides users with a real-time log that indicates how much they spent.
Let’s say, a user traveled and dined in a fancy restaurant. After using Monzo to pay for the meal, his balance is updated instantly via the app.
The app also provides him with notifications and receipt. In addition, it enables him to view a log of everything that he spent while he traveled. Now, that is the bank of the future!
But that’s not all!
Monzo does not charge overseas transactions and it has 0% commission overseas.
The fintech has a total equity funding of $17 million and a valuation of € 50 million. It was included on this list not only because its app is the easiest to use in the online banking industry, but it has also made financial services available anytime and anywhere.
Betterment is an online robo-adviser that uses an algorithm to give personalized advice to customers.
The idea is that these robo-advisers would help users grow their financial portfolio.
So, why should robots be the next financial adviser?
The idea was born out of CEO and Founder Jon Stein’s experience as a consultant for financial banks and institutions. Often, the institutions he worked with did not consider the customer’s needs. They had ties to incumbents and companies, which meant that their advice could not always be trusted.
More importantly, governments have encouraged people to invest their money for retirement. These days social security simply isn’t enough.
Enter Betterment, the personalized the automation tool that gives users financial advice on their financial assets.
For example, let’s say a user is planning to invest. At Betterment, he will receive an ETF portfolio and he will be given the option to invest in TRAs, trust and taxable accounts. Not only will the service provide him with advice, but it also managed these assets for him. This way, he can enjoy the present, without the stress of retirement.
Another great thing about Betterment is that it’s easy to use. All users need to do is to indicate their financial goals. Afterward, the robo advisor would tell them how to get to where they want to be.
Betterment’s service is way cheaper than the cost of a financial advisor. In fact, you only need to pay an interest rate of 0.35 and 0.15 percent!
But what makes it a standout in the advising industry?
Betterment’s business model is solely focused on improving their users’ financial portfolio to ensure that they have money for retirement. This differentiates it from other services that offer financial advice in the industry.
The startup is on track to become one of the stars of the fintech industry. The firm has raised $105 million in funding and has acquired a valuation of $700 million.
. A booming market, and a lot of promise
The top fintech startups are definitely changing the way you do business.
This 2017, you can get financial advice that you can trust from robo advisers. You can send money to any country. You can even pool money with your friends for any activity.
You may have some doubts about taking the leap from traditional banking to fintech services.
While it’s hard to break old habits, sometimes they’re worth it!