Author: stsai

For most tech firms, China is the hottest market for expansion. China has long been an up and coming economy with the densest population in the world. If a foreign tech company was to succeed in the Chinese market, it would open an entirely new avenue of revenue to be generated from its population. Currently the most successful firms in China are largely Chinese firms that have immediate access to the population. The financial technology industry in China seems to be expanding much like the rate in the United States. Many US fintech firms are vying for a position in the Chinese market, but many of them don’t actually know how the Chinese financial technology market actually functions.

There are multiple similarities between the financial technology market in China and the United States. Many citizens use fintech for buying and selling items as well as P2P transactions. The key difference between the US market and the Chinese fintech market is that the mobile market for the US is relatively mature and encompasses most of the market. China still has a young and rapidly expanding mobile market. A fintech company needs to be scalable in order for it to be successful in a market with over 1 billion inhabitants.

 

reference: http://www.scmp.com/business/china-business/article/2073798/how-financial-technology-driving-chinese-consumer-spending

Fintech seems to be the way forward. Many major venture capitalist firms have taken an interest to these new fintech startups. As this industry grows, what we can expect from fintech in 2017 should be continued growth and adoption by more and more companies. We have learned that trust will be a huge difference maker among consumers. The ability for fintech firms to handle sensitive information and transactions will prove to be the ultimate deciding factors for the average consumer. The mobile platforms will also see exponential growth in the coming year as more and more consumers are using fintech apps from their phone. The mobile market is allowing fintech to reach more customers especially in emerging markets.

I agree with most points but I feel that the article fails to mention the importance of industry grade fintech. Traditional financial institutions still have a massive hold over large companies and in order to break down the traditional barriers and infrastructures of old financial institutions, more robust technology needs to be made available to these large companies.

reference: http://fortune.com/2017/03/10/financial-technology-trends/

The global transaction landscape has significantly evolved over the past decade. E-wallets, E-commerce, P2P transactions are all products of consumers’ increasing trust and comfort with digital transactions. Digital transactions have proven to be less time consuming, friction-less and easy to adopt. The next market that digital transactions have targeted are the emerging markets. With the popularity of digital transaction increasing, barriers of entry to these emerging markets are slowly crumbling. Internet coverage in emerging markets is rapidly increasing and most major tech companies will seek to establish a foothold in the financial technology sectors there. The only remaining challenge of entering the emerging markets is the fragmentation of these markets. Each country has its own individual legal system, paperwork and banking infrastructure. The similarities from each emerging market is extremely different when compared to that of first world markets. The first company to figure out a method to unite each emerging market will hold significant advantage moving forward into the developing countries.

 

Reference: https://www.entrepreneur.com/article/289961

Ever since the tech boom, Silicon Valley has displaced a lot of industries with rapid growth of technology. After the financial crisis of 2008, many looked to Silicon Valley to take over Wall Street with all of the fintech start ups sprouting left and right. Wall Street proved to be a different animal to tackle because of the numerous restriction and lobbying efforts in place to protect the ancient financial service industry. The difficulty of denting the influence and power of the big banks was one of the main issues small fintech start ups have to overcome. There still has not been a single company to even come close to replacing even a small function of the big banks’ functions. Venmo and Bitcoin were seen to be the most promising companies but even they don’t even come close to reducing the influence of major financial institutions. Most new fintech startups aren’t really trying to challenge major financial institutions but instead are “add-ons” that build new services around the existing infrastructure like credit cards.

In my opinion, it will be a long while before fintech startups have the influence to upend Wall Street. There is too much influence and power within Wall Street and too much of our financial infrastructure has been built on services that they created.

 

Reference: http://www.seattletimes.com/business/silicon-valley-tried-to-upend-wall-street-now-it-works-with-the-financial-industry/

With numerous P2P transaction apps, making payments to friends and customers has never been easier. The surprising thing is that for most small businesses in the US, the paper check is still the leading way to remit and accept payments from other businesses. Paper checks has always been messy, time-consuming and slow.

The concept of Symple is when a business gets an invoice, they take a picture of it and sent it to Symple. Symple will then parse the amount, due date, etc.– and notify whoever controls the budget that there is a payment pending. Then to fulfill the payment, with one click, Symple will then remit the payment directly to the vendor’s bank account. The app then has basic analytics to help users dissect their budget even further.

I think Venmo has capitalized on the P2P market extremely well, but the B2B transaction has largely remained untouched. The first application to successfully capture the B2B transaction market is going to have a significant advantage over any other apps that try and come after.

Reference: https://techcrunch.com/2017/02/07/symple-wants-to-be-venmo-for-business-payments/

Up until recently, Bitcoin and other blockchain technologies have largely been seen as a niche segment of the transaction market. The technology has slowly been gaining more and more traction from the average user, but large businesses are hesitant to adopt the technology. Accenture has recently debuted a system that integrates technology called distributed ledger tech, with hardware security modules that corporate IT teams use to keep data safe. Many users of blockchain tech think it has the power to revolutionize the way back office systems in industries ranging from financial services to supply chain logistics.

The longstanding relationship between financial services and block chain is that they believe fundamentally in different methods for security. Financial services want to keep an closed off internal network whereas Bitcoin and other blockchain tech believe in a more free-for-all vision. The new security technology developed by Accenture seems to accommodate both parties. It lets large financial institutions use blockchain tech while still keeping their keys stored on a system that is inaccessible and incorruptable to the rest of the public. This new development could really change the landscape of blockchain users in the future as it allows larger financial institution to start investing and using currencies like Bitcoin.

Reference: http://fortune.com/2017/02/09/accenture-blockchan-security/

Fintech has been a new player in the world of financial services. Small fintech startups have been challenging large traditional financial service providers in recent years and many of them seek to expand in to developing countries. The challenge of expanding into developing countries is the lack of infrastructure. The lack of infrastructure has created a new branch of fintech called “regtech” and “infrastructure as a service” (Iaas). Trulioo is a company trying to fill the void by creating individual government identity databases around the world accessible through a single streamlined interface. Another company, Flutterwave, seeks to create payments and banking interfaces to power fintech offerings in Nigeria.

While the lack of infrastructure is the first notable thing developing countries lack, many fintech companies looking to expand into this market also need to take note that many of their users don’t have an existing digital footprint. This renders many of the traditional predictive algorithms and user tracking algorithms useless. Many of these new companies need to utilize new methods to create new user data. Developing countries are hold large untapped potential for fintech companies. The first fintech company to successfully capture a large user base in these markets will hold a huge advantage over other countries.

Reference: https://hbr.org/2017/01/fintech-companies-could-give-billions-of-people-more-banking-options

Fintech startups have been the new trend for the Silicon Valley. Many of these startups have been challenging financial service offered by traditional lenders for some time. Like any new technology, Fintech companies have gone largely unregulated for the past several years. Towards the end of 2016, the Office of the Comptroller of the Currency said that they will officially begin accepting applications for companies that wish to be regulated like a federal banking institution. The benefits will include being an established company in the eyes of the government, but they will also be subject to the same anti-money laundering controls and consumer protections of traditional financial institutions.

Seeing as the government is usually slow to react with regulation of new technology, now that the government sees that these fintech companies have replaced some functions offered by traditional financial institutions, it will only be a matter of time before they demand all fintech companies to be regulated like traditional financial institutions. This first step of allowing fintech companies to apply to be monitored like a traditional financial institution is the government allowing fintech companies to voluntarily choose to be regulated. Even if companies do not volunteer at first, eventually all fintech companies will be regulated like traditional financial institutions.

Reference: https://www.bloomberg.com/news/articles/2016-12-02/fintech-firms-get-chance-to-be-regulated-like-wall-street-banks

As the industry of Fintech grows, more and more people and companies are utilizing a form of loans called micro-loans. Although micro-loans are still in its formative stages and there are many interpretations to what a micro-loan is, it is generally a small loan ranging between $500-$100,000. Historically they have not been very profitable, but fintech has changed the way these loans work. Fintech has made it possible for people to apply for a loan and instantly get cash. An app called Kabbage provides this service to small businesses who can get up to $100,000 in as little as seven minutes with the click of a button.

This has changed not only the way micro-loans are used, but it has changed the way small businesses approach loans. Traditionally, small businesses would have to put up collateral with a bank to receive any sort of loan, but fintech has given small businesses access to borrowed cash much quicker. Not only does it expedite the loan acquisition process for small businesses, but interest rates are often much lower than that of a bank. Fintech and micro-loans has made it a much easier process for small business to apply for a loan.

 

Reference: http://www.techbullion.com/micro-loans-fintech-influencing-loan-industry/

Out of the ashes of the banking meltdown, small financial technology startups sprung up in their places. Since 2008, one of the biggest fintech startups to succeed is Venmo. Venmo is an app based peer to peer transaction app. The race to dominate the mobile transaction market has been a competitive race for the last 10 years, however, Venmo has proved to be the victor in the market with over 2.1 billion dollars transacted every quarter.

Many people have wondered how Venmo won the race for an everyday p2p transaction app when the market has been so competitive for so long. The answer lies in multiple variables. Venmo was the only app that required users to sign in through Facebook. This helped Venmo secure a large millennial user base while helping users process transactions quicker with their Facebook friends already being linked to their Venmo account. Another crucial factor to Venmo’s success was their timing. In 2010, mobile pentration in the US had surpassed 75% of the population. People felt more comfortable using mobile application to handle sensitive tasks such as the exchanging of money. The culmination of these factors led Venmo to win the P2P transaction market.

How Venmo Won In One Of The Most Crowded Spaces In Tech