Fintech In a Nutshell

Published on
Oleh Zaiats

If you are a founder/co-founder or an employee of a fintech company or a fintech investor or you are neither of them but you have any kind of close relations with fintech industry, just go to the main page. This post is not for you at all.

But if you are considering to join fintech industry in any way or you are a complete newbie to fintech and you want to know a basic things about modern fintech industry, this post is right for you.

This article gives a general overview of a fintech industry and reveals key fintech facts.

Further you will find the all the necessary information about main sectors, players, and trends in fintech industry from around the globe.

What is fintech?
The word “FinTech” is an acronym for “financial technologies”. It is widely used to describe companies and services related to the whole fintech market.
This market arose on the basis of the old fashion finance market, by which I mean all financial services provided with classical financial institutions.
In their turn, fintech companies offer different kinds of financial services using advanced technology solutions.

Top 5 Fintech Sectors
There are five hottest fintech directions by now: lending, payments, personal finance, and money transfers. Let’s give a glance at each one.

Fintech lending is almost always a peer-to-peer lending. It is a way of lending of small amounts of money by one individual/entity to another bypass traditional financial institutions. The whole process takes place on online peer-to-peer lending platforms providing by fintech companies.
Two holly words of any fintech payments solution are “faster” and “cheaper”. Fintech companies provide its customers with different payment platforms allowing money transfer, once again, bypass traditional financial institutions (i.e. banks).

Personal finance
Fintech personal finance is actually an old faithful financial adviser providing in a modern and convenient way. Fintech companies specializing in personal finance provide independent and personalized financial guidance to its customers. But a customer does not need to be a millionaire to afford these services.

Money transfers
Fintech money transfers are very neighboring to fintech payments. Similar technologies and approaches are used. The main difference is that fintech payments companies serve both for individuals and entities while fintech money transfers are mostly dedicated to individuals only.

Digital currencies
Digital currencies headed by bitcoin stand alone in the fintech world. Bitcoin is an entire independent ecosystem for a huge amount of fintech solutions. Given that, we will consider bitcoin separately below.

Top 10 fintech companies/startups
The fintech companies in the list below are ranked under their value. The biggest ones go first.
Lufax is a Chinese based peer-to-peer lender founded in 2011. Headquartered at Shanghai it is one of the largest peer-to-peer lender in China. Value: $10 billion.
Square is a US based fintech company founded in 2009 specializing in small business loans and online payments. Headquartered at San Francisco it was originally focused on smartphone card readers. Value: $6 billion.
Markit is a UK based financial information and data provider founded in 2003. Headquartered at London it started as credit derivative pricing platform. Value: $5.1 billion.
Stripe is a US based online payment processing company founded in 2010. Headquartered at San Francisco it allows companies to accept payment over the internet. Value: $5 billion.
Lending Club is a US based America's biggest peer-to-peer consumer loans platform. Founded in 2007, headquartered at San Francisco. Value: $4.7 billion.
Zenefits is a US based company providing free HR software for small businesses. Founded in 2013, headquartered at San Francisco. Value: $4.5 billion.
Credit Karma is a US based company providing free online credit reports. Founded in 2007, headquartered at San Francisco. Value: $3.5 billion.
Powa Technologies is a UK based company providing mobile payment products. Founded in 2007, headquartered at London. Value: $2.7 billion.
Klarna is a Sweden based online payment processing company. Founded in 2005, headquartered at Stockholm. Value: $2.25 billion.
CommonBond is a US based company providing peer-to-peer student loans marketplace. Founded in 2011, headquartered at New York. Value: $2 billion.

Top 10 fintech persons
Under the latest CityA.M. fintech powerlist, there are 10 most influential people in fintech.
Eileen Burbidge (@eileentso) – Partner at Passion Capital, the leading early-stage technology venture capital investment firm in Europe, based in London.
Chris Gledhill (@cgledhill) – an innovation professional spanning finance, specialising in digital technologies.
Chris Skinner (@Chris_Skinner) – a writer covering banking and technology. He is best known as an independent commentator on the financial markets through his blog TheFinanser.
Gemma Godfrey (@GCGodfrey) – one of the most popular business and fintech influencers on social media, she drives companies to achieve strong financial performance and public engagement.
David Brear (@davidbrear) –Chief Thinker at Think Different Group. He is a fintech strategist, speaker, scholar and writer. These days he spends his time helping banks, insurers, regulators, and governments be better.
Dave Birch (@dgwbirch) –Director of Consult Hyperion, the secure electronic transactions consultancy. He is an internationally-recognized thought leader in digital identity and digital money.
Oliver Bussmann (@obussmann) –a global IT executive with 20+ years of influential leadership with UBS, SAP, Allianz, Deutsche Bank & IBM. He is known for definitive business strategy, IT excellence, and large-scale reinvention.
Roger Ver (@rogerkver) –an investor in Bitcoin startups including Blockchain, LUXSTACK, BitPay, Kraken,, and more.
Mike Tinmouth (@michaeltinmouth) –a content marketing, public relations and social media specialist working with dynamic businesses across Europe, the Middle East and Africa.
John Collison (@collision) –a cofounder of Stripe – a company allowing both private individuals and businesses to accept payments over the Internet.

Top 10 fintech sources
Bank Innovation, launched in 2009, offers industry professionals a unique forum for sharing information, reading news, posting blogs, and e-networking with colleagues.
Finextra covers technology news in wholesale and retail banking, capital markets, and insurance. It also publishes a wide range of research articles, features, white papers and case studies.
London Fintech Podcast provides a lot of insights, stories and inspiration from a golden age of creativity, opportunity and innovation.
Next Bank is an independent, open and collaborative community driving change for the better in financial services through design, innovation and entrepreneurship. Its blog covers a huge amount of fintech topics.
Finovate’s blog is a great source of fintech information. Finovate provides events for a wide range of fintech companies that allows them to demonstrate their products and/or services.
The Fintech Book is the first crowd-sourced book on fintech globally. Representing thought leaders across 27 countries. Currently it contains fintech articles published by more than 164 authors.
FinTech Hong Kong is a single point of access for Hong Kong’s fintech scene. It brings together the start-ups, the community and the events that are shaping Hong Kong’s fintech ecosystem.
Bank Systems & Technology is a community for bank technology professionals. It offers comprehensive, timely and interactive online community for the exchange of information about financial services technology issues.
CoinDesk provides news, prices and information on bitcoin, and other digital currencies. It covers news and analysis on the trends, price movements, technologies, companies, and people in the bitcoin and digital currency world.
Financial Brand is a digital publication focused on marketing and strategy issues affecting retail banks and credit unions. However, they do cover fintech companies and the use of fintech particularly in the marketing space.

Top 5 fintech investors
Let’s take a quick look at the venture capital firms investing in fintech industry. Off course we consider the most prominent ones.
RRE Ventures is a US based venture capital firm. The amount of investments into fintech startups in 2014 is near $660m.
Index Ventures is a UK based venture capital firm. The amount of investments into fintech startups in 2014 is near $600m.
DFJ Growth is a US based venture capital firm. The amount of investments into fintech startups in 2014 is near $550m.
August Capital is a US based venture capital firm. The amount of investments into fintech startups in 2014 is near $540m.
Kohlberg Kravis Roberts is a global venture capital firm. The amount of investments into fintech startups in 2014 is near $520m.

Top 5 fintech cities
Given all the information mentioned above, it is not a big deal to define top fintech locations where both fintech startups and investors may easily find each other.
London takes the fires place by now. The second and the third places belong to New York City and Silicon Valley. The last two in this micro rating are Hong Kong and Singapore.

As it was mentioned above, bitcoin with its entire ecosystem stands alone in the fintech world.
The main things you should know about bitcoin if it is your first look on it are the following:
(a) bitcoin is not only a currency, it is actually a whole payment system. The system is based on peer-to-peer transactions where users interact directly without intermediaries. All transactions are recorded in a public distributed ledger called the block chain;
(b) block chain is a database. It maintains continuously growing list of data records. Block chain is used as a public ledger of transactions for bitcoin;
(c) currently bitcoin faces a lot of regulatory issues. Different countries have different approaches to bitcoin regulation. You can see here how the bitcoin regulation developed in 2015.

Top 3 fintech features
Finally, in a nutshell, there are 3 main fintech features: Cheaper, Faster, and Clearer. Each fintech company should be focused on the one of them or on altogether.