Fintech is a trendy word nowadays. It is often associated to Innovation or even to Revolution. Since the first Fintech awards in Canada in 2015, there has been many forums and competitions and Awards organized each year all around the world. But what exactly is a fintech company ? When I first wondered about that question, I had only a limited vision and I was been willing to look more closely into it in order to better understand what exactly they are doing.

When looking at some of the different 2018 awards, I realized that Awards events are facing one major difficulty. You just cannot tell what is the best fintech because there are too many categories. It is not fair to compare companies having very different funding. Also it makes no sense to compare companies working in different sectors. That is why during fintech Awards events we can often see several categories or we can see the scope of fintech reduced according to funding or localization or age during the events.

For example, the 2018 Benzinga Global Fintech Awards suggested no less than 27 categories. The 4th Canada’s National FinTech & AI Celebration in November 2018 was showing 16 categories. Whereas the 2018 Swiss fintech Awards night was showing only 2 categories.

You will find at the end of this article the list of winners of four Awards events in 2018. Those lists are very interesting for those who would like to learn more about fintech companies. Since you are reading this article, I suppose that you are indeed interested. I suggest you to check for the fintech websites to learn more. You will discover that beside the business, fintechs are often really enthousiast about changing the financial landscape.

Introduction to fintech

Since there are a lots and lots of fintech companies and since there are many categories it is complicated to answer to my initial question. What is a fintech ? However, they all have a shared strategy.

Whatever the category of the fintech, thanks to new technologies, they are most of the time building faster or cheaper or easier services than conventional financial companies. Also fintechs often target underserved people or underserved business. That is people or business having trouble to access some Financial services using the usual Financial system.

It is often said that some fintechs are performing a revolution because they are very disruptive and because they might force the entire system to evolve. Actually I would not say that the revolution would come from only a few successful fintechs but rather from the entire fintech world. Now that we know that we can do business by filling the gaps, by making services quicker and cheaper, by being more aware of the client expectations, there is no reason why it would stop until services become somehow optimized.

Investopedia.com provides a really good description of what the fintechs are today:

« Fintech in Practice: the most talked-about (and most funded) fintech startups share the same characteristic: they are designed to be a threat to, challenge, and eventually usurp entrenched traditional financial services providers by being more nimble, serving an underserved segment or providing faster and/or better service. »

It fits very well to answer at the initial question in my opinion.

Few interesting Fintechs

Kakasa

Kakasa won the Benzinga’s 2018 Best Lending Platform award with their Kakasa Loans. This a loan when «  you can pay ahead to save on interest and still have access to those extra funds if you need them ».

Tala

Tala is another lending service. It is listed in the top 50 2019 fintech on Forbes. Tala is targeting the unbanked segment. Tala looks like very passionate about their mission and they are willing to take a risk that no other lender is willing to take. However they have a 90% repayment rate with over 2.5 million customers with loans from $10 to $500. The disruptive idea is to request some very personal data on the smartphone of the customer such as purchase history, text messages, phone calls and application usages in order to decide whether the Customer is reliable enough. Furthermore the process is really quick.

Robinhood

Robinhood is a disruptive service available only to US citizens. The fun fact is that many people on online forums are looking for an alternative in Europe. Robinhood is by far the most funded company ($539 million) among the other fintechs in the Investing category on the Forbes’s top 50 innovative fintech. The latest Robinhood valuation was at $5,6 billion.

According to Forbes they have over 6 millions of customers. According to CNN.com in march 2018, Robinhood’s median age user was around 30.

Robinhood’s goal is to provide access to the Financial markets to everyone, « not just the wealthy ». In that regards the name of the fintech is well chosen in my opinion. To make it short, investing is commisssion free with Robinhood. The plateform « lets you buy and sell stocks, exchange-traded funds, options, and cryptocurrencies. They make money from premium services, rebates from market makers and trading venue, and interest rates from cash and stocks.

Even if many new services are available only in the U.S., it is very interesting to be aware of those because they might come to Europe sooner than we could expect.

Indeed, in the real Estate category for example, we are already starting to have in France some iBuyers trying to copy the successful business developed by Opendoor in the US. The objective is too greatly accelerate the process of selling or buying a housing. The iBuyers are in competition with traditionnal real Estate agencies. Journaldunet.com made are very detailled article about that on 20/02/2019 (in french):

Some Fintech Awards in 2018

2018 Swiss FinTech Award Night

  • Category : Fewer than CHF 2.5 million in funding

Proxeus mission is making « blockchain accessible to average user ». Actually they provide an easy-to-use blockchain framework that can be applied to various use cases. Eventually it would lead to easy identification, paper-less workflows, high speed processes and therefore lower administrative costs.

  • Category : Over CHF 2.5 million in funding
    • Loanboox is the winner

LoanBoox is connecting borrowers directly to investors. Loanboox claims that the processing time for borrowers is reduced by more than 90% and that the fees for obtaining a financing is reduced also by more than 90% when compared to traditionnal brokers. Furthermore it is entirely free of charge for investors.

Another important advantage is the complete transparancy. Fees are clear from the start. All offers can be easily compared. High quality diligence dossiers make efficient investment evaluation.

Fintech Awards 2018 – powered by KPMG and The LHoFT

Hydrogen won the first place out of 200 applicants from 46 countries and it was granted the title of Fintech StartUp of the Year. Hydrogen isbuilding a powerfull plateform especially designed for fintech.

About this event, Jean-Pascal Nepper from KMPG wrote an accurate comment on 21.06.2018 :

« It struck me that comparing these companies must really have been impossible for the jury, because many of them were utterly dissimilar to each other. “Fintech” is an insanely broad term, if you think about it. Among the finalists were a company whose product helps with change management; a pan-European savings investment platform; a finance document machine translator; a payment platform for African farmers—how can you compare these products, whose goals and scope and purpose are totally different? […]Well, the jury found a way, because they ended up with winners. Taking home the grand prize was Hydrogen, a company from New York that offers a sort of front office for building your own fintech solution. »

Forbes

If you are interested in discovering this world, you should visit the fintech websites. You could choose a category that you are interested in and go for the winner.

In addition to all the awarded Fintech companies above, you can also browse the 2019 TOP 50 Fintech from Forbes here.

The categorization is very comprehensive and each company have a dedicated page showing more detail about its activity.