In the last decade, Fintech is confirming itself as one of the fastest growing sectors. According to Accenture, investments have almost quadrupled between 2013 and 2016, from 4.05 to 23.2 billion dollars.
From the more traditional banking sector to the most innovative sector associated with the blockchain, investments and financing have increased, bringing news and changes on the international framework.
Accelerators and incubators are the main players of Fintech. How? Facilitating investments addressed to startups. An evolution that has led to an increase in players but also to new levels of security compared to financial, insurance and online banking environments. Cybersecurity, with its innovations and continuous discoveries, is making an important contribution to the entire sector. Topic discussed during the Startpbootcamp Fintech & Cybersecurity held in the last days in Amsterdam, yet another stage of a six-month world tour aimed at promoting innovation and discovering new talents. After analyzing over 7000 startups in the various stages organized in 23 cities worldwide, from New York to Moscow, from Tel Aviv to London, the experts were able to highlight some important trend topics, 5 segments in which some startups will make the difference from here to 2018 (and beyond).
1. B2C to B2B
The disruptive effect of startups is changing, highlighting new roles and new values. Today, in fact, startups are new business enablers, moving their operations from B2C to B2B. Rather than going down into the arena to compete with financial institutions, today we are aiming at a collaborative strategy that offers companies technological resources and speed they need. Jack Ma, CEO of Alibaba Group, recently coined a new term representing the change: TechFin. Instead of antagonists and disruptors, startups improve the models of existing financial services, becoming the strong arm of innovation.
Some examples of startups operating in this area: OptioAI, Wolfway, Penstable, Finbase/MijnGeldzaken.nl
2. Blockchain effect
Blockchain changed the rules of the game, going to reduce the operating costs of companies. Originally born as a sort of distributed register able to track and verify transactions in bitcoins, blockchain technology today allows for secure transactions without the need to receive any authorization from third parties. It also allows startups using crypto-systems for crowdfounding, raising funds through the Initial Coin Offering (ICO). As far as banks are concerned, blockchain allows them to reduce the number of participants involved in transactions, thus reducing the time and expenses required for banking transactions..
Some examples of startups operating in this area: Dolphin Blockchain Intelligence, Mezzonomy, Lendflo, CoinFlex.
3. Machine Learning
In the field of cybersecurity and information management technologies, there are several startups involved in the development of machine learning programs. Once again, the RegTechs are on the cusp thanks to their vertical expertise on technologies called Anti-Money Laundering (AML) and Know Your Customer (KYC), areas increasingly sought after by companies operating in financial services sector. Machine learning solutions are also becoming an important element in network security, thanks to the ability to identify the Advanced Persistent Threats (ATPs), a sophisticated category of threats that can trigger continuous attacks on all levels of the network. A third verticality consists of robo-adviser specialists, FinTech, who use machine learning to systematize the provision of automated advice on how to define financial investments.
Some examples of startups operating in this area: HighWave Capital, OpSeeker, Vision Tech Lab, FinCom.
4. Open banking
In 2018, the EU will introduce the Payment Service Directive 2 (PSD2 - the second directive on payment service modalities) that will oblige lenders, including banks, to share their customers' data through third party application programming interfaces (APIs) even with non-affiliated third parties. This is a huge opportunity for startups that offer payment services and digital banking solutions, at least in the EU area. Digital banks, characterized by systems that can quickly adapt to the needs of users, can thus improve their customers' experience thanlks to a plurality of value-added financial services. The entry into the banking sector for startups has always been critical but the directive opens up new possibilities, in terms of payment services and peer-to-peer loans (traditionally considered the most innovative area for FinTech).
Some examples of startups operating in this area: Hatch Money, Stampwallet, Ewala, Handcheque, Panda Money, KlippaCast.
5. Boundless horizons of Cybersecurity
Needless to fool ourselves: cybercrimes will grow proportionately to the spread of the Internet and cloud computing. As a result, systems and solutions will be developed to counter risk and threats. A growing number of startups are focusing on information security, from detection of attacks to prevention strategies. The service chain focuses mainly on providing solutions to prevent hacker actions and anticipate possible data breaches before the occurrence, as well as on systems to intercept attacks and prepare appropriate reactions. As a result, startups often work on authentication software, integrating biometrics among emerging areas.
Some examples of startups operating in this area: Gyomo, Cyber Centric, SixthCents, Keezel, InCyber1, Source Defense.
In the next 3 months, each of the 11 startups selected by the Startpbootcamp Fintech & Cybersecurity Program will have access to the global network of mentors, business partners, investors and potential customers. Teams will participate in workshops, one-on-one sessions as well as pitching and networking events that will help them move to a new business level. At the end of the program, scheduled for February 2018, finalists will present their progress on the occasion of a special Demo Day.