Over the years, a lot of new financial technologies, Fintech companies, have been established to influence the way people carry out their financial and business transactions. These technologies are expected to make all financial services better and more efficient.
The primary aim of financial technology Companies is to disrupt the mainstream payments method and offer an easier to use and cost-effective alternatives like peer-to-peer lending platforms, App based services, and digital currency like bitcoin.
In the past three years, over 2000 new Fintech companies have been able to penetrate the market, offering products and services that most big banks have claimed that only they could provide to the public such as e-payments and online trading.
Basically, Fintech services cover four key areas
• Savings and investments: This service include online investment advice, marketplace platforms for investments, online trading and budgeting and financial planning.
• Funds transfers and payments: This service includes online foreign exchange and overseas remittances and B2B and B2C funds transfers by non-banks,
• Lending: These services include peer-to-peer loans and marketplace lenders and platforms.
• Insurance: This service includes health and car insurance firms that make use of technology to reduce premium.
HOW TO RANK A FINANCIAL TECHNOLOGY COMPANY
Ranking a Fintech Company involves putting together a lot of variables. At present, there are over 10, 000 Fintech companies scattered in various parts of the world, with some of them offering different services.
Additionally, it is not easy to categorize all Fintech Companies because some are more “Fin” while others are more “Tech.” The tech-focused companies are more disruptive because they offer services like digital currencies, the software’s to replace finance instruments and Artificial Intelligence to replace finance professionals. While the “Fin” companies were established by former finance professionals, who want to use technology to make traditional financial services cost-effective.
Also, in various parts of the world; there are different Fintech Companies that both domestic and international services. For instance, China is known to be one of the biggest Fintech Market because of its large market size, the United States which also has a big market and many unicorns are not left out. Countries like the United Kingdom has more local Fintech companies. Then, there are also thousands of Fintech firms in developing countries that offer local services.
In ranking Fintech companies, here are some important variables that may be put into consideration.
Security of the system: In ranking Fintech companies, the first significant consideration will be the security of the system. Despite its advance security, Fintech still lacks the brand recognition of big banks; customers tend to have fears that their money is not safe with them. It will take a lot of time for these Fintech startups to build trust with customers but if they eventually win the trust of their clients in the nearest future, the big banks will be hit by a massive withdrawal of deposits.
Aggregate capital raised: Another factor to look at when ranking a Fintech Firm is the total capital raised over their lifetime. Any Fintech Startup that has accumulated over US$27B in aggregate should be rated as one of the top Fintech Companies because the capital raised depicts that clients have found confidence in the firm.
The Tech-Focused Companies: The Tech focused Fintech Companies that are more disruptive because of the kind of services they offer like digital currencies; software’s to replace finance instruments and Artificial Intelligence to replace finance professionals must also be put into consideration because these companies are radically changing their industry pattern for all players.
Fairness, and Transparency: It is imperative to put into account the transparency of the Fintech Company especially those who are strictly into financial services. At present, a lot of people are still scared of using Fintech startup because they find it quite difficult to trust the system. Therefore, any Fintech company that fairness and transparency must be ranked high.
User Experience: Another vital factor to look at when ranking a Fintech company is the user experience. So many Fintech firms offer her users a highly customizable interface, that is easy to use and signup. These firms make it easy for users that are not tech savvy to make use of their platform at all time.
Crowdfunding: Also, crowding finding sites must be taken into consideration because they allow the ordinary people make financial support to even the smallest project.
Finally, although there are thousands of Fintech firms in different parts of the world. However, what makes one stand out and rank top depends on one or more of the variables listed above.