Kabbage, is an online, Fintech start-up company, which loans money to businesses and individuals using online data and algorithms to measure their credit score. Kabbage was launched in 2009, but did not make its first loans until 2011. Based in the USA, the company has expanded to the UK market. To date, they have funded over 1.6 billion dollars to help businesses grow and thrive.

Kabbage has flourished significantly in recent years as exhibited by global Fintech reviews. Forbes named the company one of the 100 most promising companies in the USA for two years in a row, in 2014 and 2015.

So what is a Fintech company?

Financial technology – Fintech for short – is a term used to describe the developing connection between financial services and technological advances. Fintech include start-up companies, technology companies, and even legacy providers.

Global investment in financial technology has grown considerably in recent years. Fintech now is part of a multibillion dollar industry, predominantly controlled by start-ups offering technological assistance to financial services.

Kabbage – a top Fintech company

According to Fintech reviews, Kabbage has considerably helped the loan process for businesses that need flexible access to capital as soon as possible. This is made easy through its online application, since no application fee is required. Access to cash is granted 24/7 and money can be withdrawn as frequently as once per day. Kabbage is easy to use and does not include any hidden costs; you only withdraw the capital you need as you need it.

Kabbage does more than just calculate your credit score. The online application ensures that you get your loan verdict back within minutes after submitting your application. In order to keep paperwork at a bay, you can link your online business account to Kabbage for review.

Although Kabbage is free to use, your company needs to meet two criteria in order to be eligible for a loan. Firstly, you have to have been in business for at least one year, and more importantly, your profit should be over $50,000 dollars annually in revenue. Once you have qualified, Kabbage can let you access up to $50,000 dollars of credit.

Algomi is short for Algorithms for Market Intelligence. It is a London-based Fintech company creating trade opportunities between investors and banks carrying out multimillion dollar financial trades. More specifically, Algomi’s Honeycomb network connects those who want to sell with those who want to buy. Prior to the creation of Algomi, this procedure was only possible through speculative phone calls. Although phone calls are still part of the process, Algomi has managed to overcome time-wasting practices through targeted algorithms.

Instead of replacing traders, Algomi focuses on informing and facilitating them in the decision-making process. The human factor is still very important for the company as bond trading continues to run on personal relationships – only 10-15% of bond trades come from e-trading according to recent Fintech reviews.

What is Fintech all about?

Fintech stands for financial technology and describes various emerging start-ups. Today Fintech reviews suggest more than 2000 official start-up companies offer traditional and innovative financial services, though there may be as many as 12,000.

Fintech companies are gradually replacing certain banking services, especially when it comes to payments. There are many reasons for this including the fallout from the global financial crisis, which left behind many trust issues with traditional banks. Alongside this, the availability of mobile devices has reduced the benefits of physical distribution that banks previously enjoyed. Nowadays, smartphones enable safe and fast online payments and personalised customer services. Importantly, there has also been a huge increase in the availability of widely accessible data, which has come at a time when the cost of technology has significantly dropped. All of these reasons have contributed to the success of Fintech companies.

What makes Algomi a thriving Fintech company?

Algomi offers services for both portfolio managers, execution desks and compliance teams through Honeycomb, as well as for banks, through Synchronicity. These online platforms help provide liquidity in the bond market.

Currently, Algomi has 17 banks connected to the Honeycomb network, and more than 240 buy-side firms signed on. The company employs 150 people between London, New York, Hong Kong, Chicago and San Francisco and has also secured capital funding from Lakestar. Most recently, Euronext has made a strategic investment of $10 million to the company.

Trulioo is a Canada-based, online identity verification company, which enables online trust and safety for payments worldwide. The company offers advanced analytics based on traditional information, such as public records, credit files, and government data, as well as alternative sources, including social login providers, ad networks, mobile applications, e-commerce websites, and social networks to name a few.

Trulioo has developed two key products to further it goals: Global Gateway and Data Exchange. Global Gateway is an online electronic identity verification (elDV) service used for risk moderation and age verification by various e-commerce, finance, insurance, gaming, and social media clients. Data Exchange is an innovative platform that can pick out data partners and clients interested in offering access to consumer data.

Trulioo is a global Fintech company, currently operating in more than 40 countries, including China, Russia, and Brazil.

Fintech companies explained

Fintech – meaning financial technology – is making financial services more accessible to all kinds of customers. Fintech operates across numerous business sectors such as lending, advice, investment management and payments. Many Fintech companies employ mobile technology, big data and greater analytics to adapt products to various customer needs.

Fintech companies have directly challenged banks over the years, profoundly changing the way in which financial companies interrelate with their customers. Current Fintech reviews suggest that they have had a positive impact on society, including increased competition, a reduction in prices paid by customers and wider access to financial services.

Why is Trulioo a successful Fintech company?

Trulioo has more than 100 sources of data, mostly credit bureaus or utility companies, in more than 40 countries. This enables them to verify the identities of up to 4 billion possible consumers. Trulioo raises money to operate consistently through a number of different patrons and companies. In addition to forging a new partnership in 2016 with American Express Ventures, money was also raised through existing investors BDC Capital, Blumberg Capital and Tenfore Holdings. Fintech reviews anticipate an expansion of the firm by at least 60% with the help of external funding.

Prominent clients of Trulioo include Kickstarter and other Fintech companies like PayPal and Square.

Fintech start-ups gained massive popularity in 2015, showing signs of significant potential for growth and nearly endless opportunities for innovation. In fact, recent Fintech reviews have shown that these online companies have the potential to take away as much as $4.7 worth of revenue from traditional financial services.

Currently, Fintech companies have penetrated account management, lending and financing, payment processing, financial assets and capital markets. Undoubtedly, their major basis of appeal is their focus on their customer’s needs. Fintech companies provide the means and the technology for businesses to handle digital transactions quickly, safely and cost-effectively, when compared with traditional financial services.

Whether you are just getting into Fintech or have been interested in the technology for quite some time now, here are some currently trending Fintech start-ups to look out for.

Adyen

Adyen is a fast growing, international payments processing company with Uber, Spotify and Facebook among its prominent clients. The Dutch firm was created in 2006 and offers payment services for a variety of platforms.

Adyen has expanded and flourished due to targeted sponsorship over the years. Only last year, the company raised a respectable but undisclosed sum of money from a wealth management fund called Iconiq, which includes Mark Zuckerberg among its clients.

Currency Cloud

Established in early 2012, Currency Cloud is a London-based Fintech company operating in the payments sector. The company offers a cloud-based platform that allows users to send and receive money worldwide through an application programming interface. Compared with banks, Currency Cloud completes transactions more cheaply and faster.

Currency Cloud now processes at least $15 billion a year and has over 125 customers all over the world. This Fintech start-up raised $18 million last year from Sapphire Ventures and Japanese e-commerce giant Rakuten.

Klarna

Klarna is a Swedish payment-processing start-up, which is similar to PayPal.  Simplifying payments is the main mission of this application. Klarna doesn’t require registration and orders are easy to place by simply entering your email and zip code. According to Fintech reviews, last year Klarna raised $2.25 billion from venture capital firm Northzone and Wellington Management, while the Wellcome Trust bought 80 million dollars worth of its stock.

Betterment is an online investment adviser start-up company based in New York. Betterment is the largest automated investing service, helping people to better manage, safeguard, and grow their income and wealth. With Betterment’s technology, you can manage your investments as part of a customised portfolio created for your individual needs.

Financial advising and investments can be laborious for many people who are unwilling to pay a lot of money in order to hire investment advisors for financial reviews. Fintech start-ups such as Betterment have made investing accessible to the average user.

What are Fintech companies?

Financial technology, commonly known as Fintech, describes a business that aims at providing mainstream financial services with the aid of software and modern technology. Nowadays, Fintech start-ups directly contend with banks in most areas of the financial sector. Fintech reviews have shown that these start-ups are effective because they have managed to bring mainstream financial services, such as money transfers, lending, investing and payments, into the palms of our hands. You can now take advantage of the many financial services offered by Fintech companies safely, easily and effectively.

Is Betterment a successful Fintech start-up?

Unlike PayPal, TransferWise and other well-known Fintech companies, Betterment may not appeal to a very wide audience. However, it contains a number of features that make it one of the best investing applications available on the market.

Betterment offers weekly, biweekly or monthly auto-deposit options, while at the same time excess cash is promptly reinvested. Your mobile personal financial advisor offers automatic rebalancing of your portfolio and ensures minimum tax loss.

Since its launch, Betterment has had over 5 billion dollars invested. If you choose to invest with Betterment you will not be required to have a minimum balance in your bank account, nor will you encounter any withdrawal restrictions or transaction fees. These benefits make Betterment an easy and cost-effective solution for people who wish to invest their money safely and wisely.  The pricing scale of Betterment is attractive as well, charging a decreasing percentage of your investment balance, as your balance increases. Plus, Betterment has an algorithm that aims to make the most of your portfolio’s potential.

TransferWise is an online money transfer company, which allows you to transfer money worldwide up to 8 times cheaper than a regular bank. TransferWise technology is part of a peer-to-peer system. This means that if for example, someone wants to convert their dollars to euros, TransferWise will pair them with someone who wants to convert their euros to dollars. This way cheaper exchange rates are achieved for both parties.

Since its creation in 2011, TransferWise has helped over one million customers worldwide. Some of the founders of TransferWise are also responsible for Skype, the most popular audiovisual call making software, which was recently bought by Microsoft. In the previous years, this Fintech company has transferred more than five billion dollars.

Defining Fintech

Fintech describes the developing crossover between financial services and technology. It is an umbrella term that can refer to start-ups, larger technology companies or even legacy providers. Although it is sometimes difficult to understand where technology ends and financial services begin. Fintech, referring to financial technology, is a favourite word among the media but is not always used correctly.

Recent Fintech reviews suggest that start-ups are more about using innovative technology to offer mainstream financial services at lower costs, whereas larger technology companies are more interested in acquiring work with smaller start-ups by providing various payment tools. All these companies are what we widely describe as Fintech.

Why is TransferWise a Fintech company?

Whereas banks easily hide fees behind ‘exchange rates’ without you even knowing, TransferWise is entirely transparent. On their website, you will find a currency exchange calculator. The only thing you have to do is to enter the amount you plan on transferring, the two currencies, as well as the origin and destination of the money. The calculator will offer you a guaranteed rate, which is usually the most cost-effective along with the standard TransferWise fee and the amount of money you saved by not using another money transfer service. TransferWise uses the official mid-market rate which is updated on a daily basis.

Fintech reviews have shown that TransferWise exchange rates are consistently lower compared to banks or other money exchange services. Most transfers will take as little as a day, but sometimes may take between 1–4 business days to process completely.

GoFundMe is a start-up company founded in San Diego. It first appeared online in 2010, and since then has helped millions of people raise money for various campaigns.

In the last year, GoFundMe users raised over 2 billion dollars for a variety of causes. Unlike similar platforms, GoFundMe is a highly reputable company with a transparent business ethic. People use it to raise awareness and money for medical, environmental, political and other issues. Currently as much as 4 million dollars is raised on average every day by its users.

The basics of Fintech

As we shall see, there are many reasons to qualify GoFundMe as a Fintech company. But before getting on to that, it is essential to understand what Fintech encompasses. Short for financial technology, Fintech refers to companies with an online presence that operate in mobile payments, money transfers, loans, fundraising and even asset management.

Recent Fintech reviews by Accenture established that global investment in Fintech start-ups has gone through the roof, from $930 million back in 2008 to over $12 billion by the start of 2015.

Why GoFundMe is considered a Fintech start-up

GoFundMe is a successful Fintech start-up for many reasons. Firstly, unlike similar websites, GoFundMe users get to keep every donation they receive and are not forced to withdraw the money by a specific deadline. This way, if you choose to start a campaign on GoFundMe, there is no danger of losing your money.

What’s more GoFundMe does not impose any goal limits. This means that fundraising campaigns can be as little or as much their creator wants them to be. More importantly, Fintech reviews have shown that in terms of pricing GoFundMe is cheaper than other platforms. It withholds 5% from each donation received, charges 3% for WePay transactions and charges no more than 30 cents per transaction. If you decide to start a campaign on GoFundMe you will soon realise that the fees are some of the lowest available among similar companies.

GoFundMe can be used for personal reasons and important life events, meaning it’s less limiting than some of its counterparts. Moreover, customer support is readily available and the website is easy to navigate.

It is a fact universally acknowledged that when it comes to online payments, PayPal is one of the most favoured solutions among customers. However fewer people may know that PayPal doesn’t just help with online customers. It is also useful for freelancers and business owners, who are looking for quick and safe online transactions with the lowest operational cost.

How it works

Once you create a free account with PayPal, you can send money to anyone with an email address using your PayPal balance or another funding option of your choice i.e. credit or debit card. This makes online transactions quicker and easier.

Nowadays, PayPal is the world’s largest online payment network with over 20 million users across 38 countries. It is the preferred method of payment for large websites such as eBay, since it guarantees effectiveness and security. However, PayPal offers more than an operative way to buy goods online. It is a great example of a successful Fintech product, using innovative technology to aid financial transactions. As a result it continues to increase in popularity.

Understanding what makes PayPal a Fintech company

Fintech reviews suggest that some companies come up with innovative ideas, while others take already established ideas and execute them in a better way. PayPal belongs to the first category with two major innovations in its favour: the digitalisation of money and the rising use of mobile devices for transactions. For example, 5 years ago only 1% of PayPal’s transactions were executed on mobile devices. Nowadays, the percentage has risen to approximately 33%.

It may be hard to see but banks, as we know them, are going through a widespread transformation. Modern banking is completely different from what it used to be 10 years ago. That’s partly due to Fintech companies and the capacities they offer.

Recent Fintech reviews suggest that these new technologies are game changers in the wider financial sector. However, with power comes responsibility and we should be careful to protect our personal data from potential leakage. Most Fintech companies offer perfectly safe platforms for transactions. However protecting yourself from loss is of growing importance in this new sector, regardless of whether you are a customer or an investor.

Isomer Capital says fintech will be ‘important investment theme’ in midst of a ‘European technology renaissance’.
Isomer Capital announced a €150 million investment fund aimed at European technology-based businesses.

Soft launched towards the end of last year, the fund has already invested in five VC funds, covering 96 portfolio companies. Algomi, an information network for bond trading, is one of the high profile fintech companies currently in Isomer’s stable via its investment in Hoxton Ventures.

…Europe is three times more likely to create a Unicorn company.

“We see (that) some of the most exciting and brilliant start-ups are happening right now in the fintech space,” said Chris Wade, Partner at Isomer, speaking to Finance Magnates via email.

“If you look at a snapshot of our current portfolio, we have businesses like Stockholm based Cryex – the currency trading platform that will offer the European market transparency on price and cost, whilst increasing speed and lowering risk in clearing and settlement of FX products.”

Another company Wade pointed to is PassFort, which has developed a turnkey compliance platform designed to automate the collection, verification and secure storage of customer due diligence data and documentation.

Many of the best deals in the European technology market are private, move fast, require specialist expertise and still have high individual risk profiles, the firm said in a statement, noting that initial start-up funding for over 33,000 new European companies each year comes mainly from business angels or high net worth individuals.

…European financial industry has always been an early adopter when it comes to new technology.

And though local funds provide subsequent capital to growing companies, throughout Europe, US-based investors provide capital to two out of every three financing rounds over $10 million in size.

Isomer’s strategy to early stage technology investing is in part an institutional approach, meaning the fund is a traditional GP/LP structure used in private equity, and open only to professional investors, explained Wade.

It partners with VC firms and supports them with expertise and additional capital. To date it’s invested in groups like Hoxton Ventures, White Star Capital, Felix Capital and Entrepreneur First and Connect Ventures.

The focus in Europe specifically targets funds backing technology-enabled, high potential businesses with the ability to scale in a capital efficient way to global markets, he added.


“When you look at the amount of capital deployed in Europe versus that of the US and compare it to the number of $1 billion valued companies created, Europe is three times more likely to create a Unicorn company,” Wade noted.

Fintech will be an important theme for two key reasons, he added.

“Europe has a number of the world’s most significant financial centres that are at the epicentre of innovation (and) the European financial industry has always been an early adopter when it comes to new technology.”

 

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Verena Ross, executive director, European Securities and Markets Authority said the way the regulator tracks innovation is a challenge and needs to be principles based.

The European Securities and Markets Authority held its second Financial Innovation Day on 16 December 2015 and posted details on its website yesterday.

Ross said in her closing speech: “The financial markets across our 28 member states differ from one another in terms of breadth, depth, volume and sophistication of market participants. In turn, the innovation framework we employ must be a principles based one, needing to remain flexible as the underlying markets are dynamic.”

Adrian Blundell-Wignall, special advisor to the Secretary-General of the OECD on financial markets and director in the Directorate for Financial and Enterprise Affairs, said in his keynote speech that the cost of new regulation for six large systemically important banks since 2007 has been $35.5bn.

“These costs are high, and as such act in favour of established firms, putting smaller competitors at a disadvantage or prevent new companies to enter the market,” added Blundell-Wignall. “But new technologies have allowed some nimble competitors to enter the market, and some did so by benefitting from market inefficiencies that established banks have been unwilling or unable to explore.”

Blundell-Wignall praised the Innovation Hub established by UK’s Financial Conduct Authority. “Perhaps some type of “regulatory sandbox” model, may be a good way to go,” he added.
The UK regulator launched Project Innovate and the Innovation Hub in 2014 to provide direct support to firms trying to launch new products into the market which may benefit consumers and to be the centre of the FCA’s innovation policy. Last November Christopher Woolard, director of strategy & competition at FCA, said in a statement that the project had helped approximately 177 firms and the regulatory sandbox provides a safe space for firms to enter the market and experiment with new ideas

“We’ve also had a lot of engagement with people in a very different way for the regulator to do it,” added Woolard. “So we’ve been holding a whole series of roundtables, workshops, events where we reach out and actually share problems with people and try and really gather experience both here in the UK, but also experiences that people have had internationally. One example of the engagement work that we’ve done is the events we held around robo-advice.”

Yannick Brunner, chief compliance officer of WealthKernel, said in a statement: “My experience with the Innovation Hub has been a very positive one, for three main reasons: one has been the direct support we have been receiving to help navigate the quite complex regulatory landscape. The second has been big cost savings from allowing us to forego costly consultants and the last one has been really giving all co-founders a nudge at getting directly involved with the compliance angle.”

Esma’s Financial Innovation Day included four panels discussing crowdfunding; corporate bonds and whether innovation can reduce the liquidity gap in these markets; blockchain or distributed ledger technology and leveraged loan funds.

On corporate bonds, Ross said there are an increasing number of new trading initiatives trying to bring together investment banks, fund managers and investors as markets have become less liquid.

“While some initiatives, like ‘all-to-all’ trading platforms focus on reducing the role of the middleman, i.e., the bank, others, like Honeycomb, aim at improving pre-trade information,” added Ross. “Yet, more time and scrutiny might be needed before they can effectively be considered as a replacement to the traditional request for quote trading model.”

Honeycomb is part of Algomi, the network for matching bond buyers and sellers. Algomi was launched in 2012 to build a social network for the corporate bond market by building internal networks for banks to connect together staff who could help transact less liquid corporate bonds. The firm has since added asset managers to its Honeycomb network so they can easily and quickly find the best bank to execute large trades.

Another hot topic was blockchain or distributed ledger technology. “The DLT certainly is THE innovation of the moment. The Bank of England recently called it the ‘first attempt at an Internet of finance’,” said Ross.

Esma is collecting feedback from market participant on blockchain development.
“We believe that the [DLT] technology may well help with streamlining post-trading services, reducing costs and increasing security and transparency in the financial system,” added Ross. “Yet, for this to happen, a number of challenges, including around privacy and governance issues, will need to be addressed. The transition to the new system may also prove complex and resource intensive.”

 

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