Published on February 3rd, 2021
Fintech is a broad term used for technology being used in the financial world. The technology that falls under this umbrella includes financial products and services many of us use today such as crowdsourcing platforms, peer-to-peer lenders, virtual financial assistants, mobile payment apps, and more.
Many different tech solutions are considered fintech but they all work in very different ways. These solutions appeal to a wide variety of users and are used by a diverse mix of people and companies.
With just a quick glance at the top fintech solutions available today, you would be hard-pressed to come up with many commonalities other than the fact they are all tech products used in the financial industry.
Upon closer review, though, there actually are several elements many fintech solutions share, especially when you compare the best fintech solutions.
They aren’t necessarily similar in function but you can draw parallels between what they accomplish and how they accomplish it. Here is what the best fintech solutions have in common.
1. Initially Disruptive
When the best fintech solutions start out, they disrupt the financial industry. This industry is dominated by giant corporate entities, many of which have been around for decades or even a century or more. They tend to control most of what goes on in the financial world.
Successful fintech takes an idea, uses technology to implement it, and turns the financial world on its head. Fintech tells people there is another way to do something that the “big guys” aren’t providing. This disrupts the world of finance and leads to even more innovation.
You can create the best fintech solution in the world but if it isn’t secure, it will never succeed. Cyberattacks and cybercrime have long been a major problem in all corners of the digital world but, thanks to the global COVID-19 pandemic of 2020, this problem is now worse than ever.
A major focus on security is something that all the best fintech solutions have in common, according to Liventus.
For these solutions, security starts at a coding level while building out the architecture of the product and goes from there.
The best fintech companies take things like encryption and authentication very seriously and take steps to keep these issues on the cutting edge of development practices.
Since large institutions have long-controlled much of the financial space, there wasn’t much competition among financial service and product providers.
This led to a situation where the providers didn’t have much of an incentive to make sure that the solutions they provided were user-friendly.
The best fintech solutions are competing with and trying to disrupt the biggest names in the industry so they have every incentive to be as user-friendly as possible.
This is one reason they put such a premium on user experience (UX) design. They make the look, the feel, and the use of the product as enjoyable and easy to understand as possible in order to get more people to feel comfortable using it.
4. Employ The Latest Technology
Saying that all the best fintech solutions use the latest technology may seem obvious on the surface but it is a major commonality to note.
Most importantly, the best companies use the latest and greatest technology, generally before it is widely used in most industries.
You can see how this use of technology progresses by looking at all the fintech solutions that used mobile apps years ago before they were incredibly popular.
Using the latest technology continues today. Fintech solutions are currently using technologies such as artificial intelligence, machine learning, blockchain, the Internet of Things, and more.
The best fintech is on the cutting edge of these technologies and can harness their power before most others figure out how to do it.
5. Early Adoption Of New Practices
Closely related to the fact that the best fintech solutions use the latest technology is the fact that these solutions also adapt quickly over time.
They are not only on the cutting edge of the technology that they start with but also with other technology that comes down the line.
They are able to add features and functionality and adapt to new platforms as they grow which is what makes them so successful.
The fintech startup known as Confinity is a perfect example of this. The company started by partnering with early internet retail sites like eBay to offer them a digital way to accept payments in addition to the pay-by-mail options they were using at the time.
The company adapted to the times and the technology and added features to work for new users in new ways. By doing this, they were able to grow into a Fortune 500 company. Along the way they changed the company name to PayPal.
6. Adopted By Mainstream Institutions
The first item on this list states that the best fintech solutions are disruptive to the financial industry and that is true.
One last point the best fintech products and services all have in common, though, is that after they disrupt the industry and become popular in their own right, they are generally adopted by the large companies they disrupted.
PayPal and Venmo incredibly turned our mobile phones into virtual wallets. Now, Apple Pay is a standard feature on every iPhone. AI-based virtual assistants changed the way we interact with technology. We get help from Bank of America’s Erica and Capital One’s Eno.
These corporations may be caught off guard at times when the newest fintech materializes but they didn’t get where they are by being dumb. When these traditional companies see the best fintech succeed, they race to implement it into their own systems.
Kickstarter and SoFi Bank and a company that uses AI to help with fraud detection all seem like very different products and services. However, these companies and others all have fintech solutions that have succeeded for many of the same reasons.
These companies are disruptive, secure, user-friendly, and adapt and use the latest technology. They also have great ideas that are eventually adopted by bigger companies. That is what the best fintech solutions have in common.