Overview of promising companies on which the development of financial technologies in 2020 will depend.
A decade after the financial crisis and the birth of Bitcoin, financial technology is about to disrupt the biggest networks and services on the planet. Thanks to advances in mobile tech, 5G, blockchain and a bunch of trendy acronyms like AI, IoT and RPA, these companies are challenging traditional market leaders and inspiring new customers with simpler, cheaper and more user-friendly products.
More investment billions poured into fintech firms in 2019 than in the previous two years combined, and with good reason. The value unlocked by technology could, some say, make the Internet boom look like a day at the penny arcade.
Although it’s tough to pick the best fintechs for 2020, it’s easier to namecheck the ones that laid the foundations in 2019. Payment processors like Stripe, Ripple and PayPal all gained ground in the race to make legacy systems like Swift redundant. Even big boys like Apple, Google and Facebook made their own surprising fintech moves. By the time you read this, there are probably over 5,000 digital or neobanks vying for your dollars and a coveted spot on your app list. The business that began with a single service pivoted to become gateways to the entire world of financial services, and this so-called bundling was a key fintech trend.
Tech innovations drove down fees on mainstream trading platforms, an unlocked value in invoicing and promised great transformations in lending, investing, wealth management and the tokenization of real-world assets. Insurance, compliance, and healthcare all had their moment in the limelight too.
Blockchain technology proved it’s here to stay with enterprise and state-run prototypes generating more interest than the early cryptocurrencies that paved the way. Will Bitcoin and the many nimble Davids have more success than the Goliaths this year? Let’s hope not.
Fintechs To Watch In 2020
After expanding their offering and user base, fintechs in the mainstream industries are ready to scale up. Blockchain projects that spent 2019 BUIDLing should are now expected to produce the first market-ready products. Although any 2020 list could include dozens of disruptors, here are just six fintechs you should remember in 12 months’ time.
Revolut
While only the barking mad would bet all of their chips on a single neobank to rule them all, Revolut is the one that caught our eye. The UK fintech firm launched its digital bank in 2015 and now has over 10 million users.
There’s no shortage of app-only banks but unlike the rest, Revolut love a good cryptocurrency and allow their users to buy and sell Bitcoin, Ether and several others.
Like all ambitious fintechs that haven’t yet turned a profit, Revolut are out to raise a billion & change this year. If successful, the $5 billion business will be Europe’s most valuable fintech.
With that kind of cash lined up, they’re promising to expand into 24 territories and triple their employee headcount. But they better keep their pedal to the metal with challengers like Nubank, N26, Monzo and Digibank all hoping to win global banking’s Game of Phones.
The rise of DeFi will be one of 2020’s biggest crypto trends and the current market leader, Maker, should cement its position at the top.
MakerDAO is an open-source, Ethereum-based platform that allows you to trade, borrow and save using its own stablecoin and token. Users can borrow against their token holdings or earn far greater rates of interest as a saver than with any bank. At the turn of the year, almost $400 million of digital assets were in play on the platform, and many market commentators believe it’ll be billions by the end of 2020.
Maker’s DAI token is the 5th largest stablecoin by market cap and was the first of its kind to be integrated into the Coinbase Card. Rival fintech Compound is tipped by many, including Binance Research, to depose Maker this year but with new products and a planned expansion into Asia, Maker won’t give up its dominance without a fight.
Circle
US company Circle is arguably the most important crypto financial services firm and it’s not all down to the $300 million its raised from institutions like Goldman Sachs. What started as a bitcoin exchange has quickly matured into an enterprise solution based on the USDC stablecoin it created in collaboration with Coinbase. Pegged to the US dollar, USDC was the fastest growing of the major stablecoins in 2019.
The company announced the closure of its payment app, sold its OTC trading arm and chose to keep new acquisition Poloniex at arm’s length, so it can focus on the real play for 2020 and beyond. Its next move is the launch of payment, custody and wallet APIs using its USD Coin, designed for enterprise use.
Although not everyone’s idea of an exciting blockchain project, the likes of Circle will be critical if we’re to ever reach the fabled land of mass adoption.
If you ever need to sell your house in 24 hours without lowballing yourself, Opendoor is where you’ll start. The $4 billion tech firm launched in 2014 on a mission to revolutionise the real estate sector. Using their data-driven platform and mobile app, property owners can sell their property with virtually no effort. Opendoor allows viewers to access homes using their mobile phone and guarantees sellers a cash offer within 24 hours. Despite these innovations, it won’t be easy to gain market share in a $1.6 trillion market that is notoriously difficult to disrupt. Leveraging their expertise in data analysis, a slick interface, local expertise and innovations like smartphone access to open house viewings, Opendoor’s tech approach can pay massive dividends in 2020. Opendoor aims to operate in 50 US cities this year and if anyone can finally make inroads into this ancient marketplace, it should be them.
KickRef has reached over 400,000 users within 4 months since the launch. The project has proven itself as the kind of referral program a next-gen crypto exchange deserves. Created by Russian fintech Kick Ecosystem, KickRef is a fairer, more transparent model for fintech referral programs which shares up to 50% of all trading revenue from the KickEX exchange (uses a banking approach in architecture and security). Here you can use a different variety of smart orders, like double-stop and trailing-stop orders.). The exchange is now in the beta testing phase.
The KickRef model, created by the Kick Ecosystem Russian fintech company, is fair (the easy entry with free registration), affordable (a free education platform the users is being developed) and a transparent referral program that shares with its partners up to 50% of the income from commissions on the exchange. By registering in the KickRef program, the user receives a personal link through which they invite new partners to their network. Then they develop the referral network and receive income from each branch. The more extensive and developed the network is, the higher the income. Although KickRef platform will be used in the connection with the exchange, there is a huge potential to apply the format and core values to many other types of fintech enterprises that seek to offer an additional passive income to their users.
Fintech may be the language of Silicon Valley but its impact will be far greater in developing nations where products built around financial inclusion are taking centre stage. Nigerian startup Opay will be using funds raised from Chinese investors and the company behind Opera, the second most popular browser in Africa, to expand their mobile payments solution to Africa’s 1.2 billion unbanked individuals and businesses.
They’ve already raised $170 million, signed up over 150,000 users and won plaudits for things like ride-hailing integrations, but competition is fierce. Vodafone’s M-Pesa, the established player in the region, and VISA-backed Interswitch, Africa’s only unicorn, are just two of the many well-funded fintechs looking to unlock Africa’s potential.