With the emergence of new technology and the evolution of the banking relationship moving from traditional brick and mortar to pure digital environments, the growth of non-bank, FinTech startups is booming around the globe. In 2013 alone, innovation enabled by new consumer behaviors, technology and regulations, private FinTech companies raised nearly $3 billion in funding – more than tripling the $930M invested globally in FinTech in 2008. This growth in global FinTech investment is shown in the chart below from Accenture and CB Insights.
While all this technological change is happening, a new generation of banking customer is also emerging and creating a new challenge for the banking sector. According to Accenture, millennials are seen as more conservative and less trusting of banks than baby boomers and Gen Xers. Instead, they are increasingly drawn to emerging financial technologies and non-bank services that are at the forefront of change in this sector.
To explore the tremendous growth trajectory and opportunities in FinTech, we recently partnered with VentureBeat to offer a webinar featuring these experts:
While all this technological change is happening, a new generation of banking customer is also emerging and creating a new challenge for the banking sector. According to Accenture, millennials are seen as more conservative and less trusting of banks than baby boomers and Gen Xers. Instead, they are increasingly drawn to emerging financial technologies and non-bank services that are at the forefront of change in this sector.
To explore the tremendous growth trajectory and opportunities in FinTech, we recently partnered with VentureBeat to offer a webinar featuring these experts:
- Rich Karlgaard: Co-Founder of Garage Technology Ventures, Forbes Publisher
- Sonny Singh: Entrepreneur, Angel Investor, Commercial Officer at BitPay
- Joseph Polverari: Chief Strategy and Development Officer, Managing Director, Yodlee Interactive
- According to CB Insights’ article on The Boom in Global FinTech Investment in March 2014, global investments in FinTech amounted to $3 billion in 2013, which is more than three times what it was in 2008.
- “Cash, credit cards and checks are the main ways that people have paid since the 1960’s and they weren’t designed for the Internet. Huge inefficiencies exist and now startups are coming into the ecosystem with innovative financial solutions.” – Sonny Singh
- “The vast population of the world, 2.5B people, have access to the web right now. The next 1.5B people will have very little or no banking access at all. This creates a huge opportunity to reach the under-banked.” – Rich Karlgaard
- “For millennials in developed countries – trust in financial institutions has collapsed. Millennials are leading the charge and driving change in the FinTech sector.” – Rich Karlgaard
- “Bitcoin is largely a younger demographic. It’s 40% US based and 60% international, a very tech savvy crowd. They like using Bitcoin because it lowers interchange fees. It’s cheaper, quicker and easier to use.” - Sonny Singh
- “The level of disruption depends on the size of companies. Tech giants such as Amazon that are expanding banking features are getting there faster and are less innovative. In contrast, smaller startups are creating broader disruption with solutions that were traditionally offered by banks.” – Joe Polverari
- “Wealth management is being disrupted rapidly everyday. For example, LearnVest and Personal Capital are building solutions that are hybrid digital and human based, which creates a smoother process and better planning. Yodlee Interactive offers the biggest platform in the industry for creating these solutions.” – Joe Polverari
- “Hot categories in financial tech include wealth management, marketplace lending, digital identity and lifestyle banking/finance.” – Joe Polverari
- “Apple has $150 billion in cash and Walmart is richer than most countries. These types of well capitalized startups and large companies from banking and non-banking industries will be investing in this space.” – Rich Karlgaard
- “Bitcoin is a decentralized currency that isn’t backed by any government. Most millennials trust technologies companies rather than banks. This includes Google, Apple and Facebook who they work with everyday. Bitcoin sits in the middle. As more merchants adopt Bitcoin, trust among mainstream America and millennials will also increase.” – Sonny Singh
- According to Gartner’s Forecast: Enterprise IT Spending for the Banking and Securities Market from 2011-2017, banking and securities institutions are estimated to spend $485 billion on information technology in 2014 – more than any other sector.
- “Our ecosystem knows where the opportunities are. For example, Yodlee Interactive has several hundreds of non-bank entities on our platform covering 35+ sub-vertical markets (automated tax prep, automated divorce dispute resolution, targeted marketing based on financial data, creation of new data trends based on aggregated financial data, etc.)” – Joe Polverari
- “There is no specific area to capitalize. The key question is: Who will be the most successful at marketing it? Who can build a solution that’s the most integrated in your life and take the friction out of managing your money?” – Joe Polverari
- “In terms of new technology, voice enabled capabilities are interesting. We’re starting to see smaller companies that are building very slick implementations on top of money movement and financial management technology, e.g. speak to command and it will happen (transfer money to a checking account, apply for a loan, etc.)” – Joe Polverari
- According to Larry Wall at the Center for Financial Innovation and Stability, financial technology continues to advance with more and better data being analyzed by increasingly sophisticated empirical techniques.
- “The financial sector is ripe for disruption. However, the issue is that entrepreneurs come up with great ideas to make the banking sector more efficient; then all the banking rules and regulations come into play. Partnerships with banks can help startups to navigate through this maze.” – Sonny Singh
- “Startups need to consider regulations and security when building financial apps, as managing money has a profound effect on people. Yodlee Interactive makes sure that innovations on our platform are delivered in a way that’s legally compliant and makes sense from a regulatory perspective.” – Joe Polverari
- “Our cloud-based platform has three elements: data, payments and security. As an entrepreneur in financial services, it’s largely predicated on aggregating data and making sense of it for financial management (pay a bill, transfer a fund, etc). We have that capability on an API layer and we are audited and supervised by the government.” – Joe Polverari
