Fintechs continue to evolve and set standards to the application of new technologies that are transforming financial services. Technological disruption and the proliferation of financial systems on the Internet are generating new business models. They pursue the objective of streamlining economic transactions through financial technology-based platforms. But...
What is the fintech map today? What trends does it bring us? Are they coming to stay?
Fintech: concept and functions
They occupy an increasingly prominent position in today’s financial landscape. The term fintech combines the terms 'finance' and 'technology' and focuses on financial services companies that use the latest technological developments to provide products or services. But... do you know its main functions?
- Payments and transactions.
- Personal finance management.
- Consulting and marketing platforms.
- Financing and lending approaches.
Within these 4 application scenarios we find financial activities such as: online credits, digital payments and currency exchange through the web. In short, these are products and services that bring technology and money together. The arrival of technology in financial services has led thousands of emerging companies to decide to offer users a wide range of opportunities.
However, the aim is to offer new financial services with technological support, offering 100% online banking products and reducing costs. In short, the access to more banking products is being democratised, something we can quickly see if we take a look at the start-ups that make up the fintech map.
We find companies based on mobile banking, crowdfunding, cryptocurrencies, automated process management, payment methods, predictive models, payment gateways, etc.
Did you know that Spain is one of the world’s leading countries in terms of people's use of fintech products and services?
The map of the main fintech start-ups in Spain
Every year numerous events are organised to recognise the main start-ups in the fintech industry for their work in reinventing financial services and the security they provide.
In February of this year, the ECOFIN Forum selected the TopTen Fintech 2020 in Spain, where you can find the following companies: Aplázame (consumer credit), Bnext (Financial services marketplace), Creditea (credit to individuals), Finizens (Investment-WealthTech), Housers (PropTech), Life Box (InsurTech), N26 (Challenger Bank-Mobile Banking), October (credit to companies), Treasury (financial services to companies) and Woonivers (LegalTech).
The Spanish fintech map brings together the main start-ups of the country organised by the different activity verticals and is updated every few months. According to Finnovating, in 2019, the new additions to the map were: Neurofintech, Rapicash and Borrox, in the Lending vertical; Finanzasamedida and Combina, in that of Personal Finance; Factorial, in Tax & Accounting Solutions; Prestalo, in Financial Products Distribution; and CardYou and IbanWallet, in Neobanks and marketplaces.
The fintech revolution is on the agenda, although at the beginning of 2020, it was confirmed that Spanish financial technologies were at an early stage where they lacked potential growth due to lack of investment, according to El Confidencial.
The 3 main trends in the fintech sector
We are now in the third quarter of the year and we already have our sights set on what 2021 will bring us. Payment technology trends are alerting us to some major developments. Let's take a look at them!
- The rise of invisible payments.
These are payments that hardly require physical contact or people's intervention to be made, as they don't even need to carry money in their pockets. For example: Selfi Pay (the next big advance in biometrics in payments points to the Iris scanner), payments by link, SMS and QR code, among others. The security of payments is ensured by data tokenization and biometric identification.
For several years, blockchain has become a booming technology, not only in the cryptocurrency sector, but also in many others: automotive industry, pharmacy, health, production chain, tourism, advocacy, etc. The traceability it provides increases the safety and control of processes in companies.
- The use of cash is reduced.
This trend continues to grow alongside the alternatives in payment methods and channels used by eCommerces around the world. We see it, especially in European countries such as Sweden, where the vast majority of payments are already made without using physical money.
Regulation of the PSD2 policy
We could not ignore the entry into force of PSD2, the regulation that focus on remote control of transactions.
The only way to keep online business safe is to adapt to it, which aims to bring new forms of electronic payment to life, while increasing consumer confidence in it. This is the second part of a first European payment regulation that sought to unify all payment methods within the European Economic Area. This time, it puts the focus on online payments.
The PSD2 is one of the most important points for e-commerce in 2020, as the new European regulation on digital payment services impact business in the following way: it improves the level of personal information protection and strengthens Enhanced Customer Authentication (SCA).
The PSD2 makes it compulsory to introduce authentication factors that increase security and carry out two of the following factors:
- "Something inherent to the customer, such as his fingerprint."
- "Something owned by the customer, such as his Smartphone".
- "Something known to the customer, such as the pin."
Are you committed to modern, compliant technology? How does it affect your online business?
The PSD2 introduces changes in the field of fintech. For example: with the holder’s authorisation, third parties can access a customer's account at their bank and make payments on their behalf. Now, it is intended that it is not the merchants who have to contact intermediaries and that they do so with the entities responsible for issuing the card for collection.
Streamline your online shopping processes!