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Where to Invest in Fintech and Make Money

The fintech sector has experienced an explosive growth in the recent past partly due to a slew of fintech investments and new industry trends. Venture Capitalists as well as other investors are keen on investing in this promising sector. With fintech anticipated to continue booming, thanks to its disruptive trends that are attracting more and more consumers, it is time to invest in this sector. Here, we bring you the best fintech subsectors you can invest in.

Payment Services Industry

Fintech payment services industry is expected to continue flourishing thanks to its convenience and efficiency. Online and mobile payments are gaining momentum both in the developed and emerging markets. The number of companies venturing into this subsector is enormous.

Fintech Banking Industry

Fintech banking which covers internet and mobile banking continues to grow at a considerably high rate. Fintech banks have many advantages over their legacy counterparts. For instance, you do not need to incur substantial capital expenditure to set up facilities for fintech banking. This is in sharp contrast with the traditional banks where you have to acquire as many banking halls as possible to secure your bank’s presence.

Additionally, fintech banks provide innovative solutions that can be tailored towards individual client’s needs. Moreover, they are more efficient, thus offering more competitive rates than the traditional banks. As technological advancement continues, the efficiency of fintech banking will increase as well. Therefore, this is the place to put your valuable investments.

The large population that is unbanked, especially in developing countries is moving to fintech banking directly without even owning a traditional bank account, further demonstrating the high potential of fintech banking.

Investment and Stock Fintech Industry

Robo advisors are increasingly playing a pivotal role in the investment and stock industry. According to BI intelligence, robo advisors will manage up to $8 trillion worth of assets by 2020. Currently, robo-advisors fall into three distinct models including:

  • Standalone robo advisors that use algorithms to manage portfolios and recommend stocks  
  • Hybrid robo advisors that combine computerized advice with human advise
  • Advanced standalone firms that employ complex algorithms in the creation and management of portfolios.

As more investors are turning to robo-advisors for investment advice and portfolio management services, you would be safe investing in this area.

Insurtech Industry

The hitherto strict regulations in the insurance sector are being replaced with more flexible ones. As a result, insurtech is picking and will definitely expand because it offers more customer friendly services. Customers are able take an insurance cover from the comfort of the office or house. The fact that VC funding in the insurtech sector grew by a whole 225% between 2014 and 2015 is indicative of the sector’s potential. Insurtechs may be categorized as:

  • Disruptive insurtechs that obtain license to underwrite and issue their own policies. They have a high potential for growth as illustrated by Zhong An, a Chinese digital only insurance firm that was established in 2013 and has underwritten over 630 million policies.
  • Enabling insurtechs that work with the legacy insurance firms to help them improve customer experience and improve earnings.

As you can see, the insurtech sector has a lot of untapped potential and you can reap big by investing there.

Currency Markets

In currency markets, the Blockchain technology is changing everything. It is well known for powering cryptocurrencies including Bitcoin and Altcoin. Blockchain technology is being adopted by finance services firms because of its huge potential to stream processes and increase efficiency. Santander predicts that Blockchain could reduce costs by up to $20 billion by 2022. It is no wonder then that the sector continues to attract plenty of investments. You could be one of these investors.

These are some of the fintech areas that have a high potential for growth therefore good for investment. However, the list is not conclusive because most of the fintech sectors are doing pretty well.

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