5 Fintech industry trends in the coming years

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A new study conducted by Bynd Venture Capital, a venture capital management company, and developed by the Venture Capital Club, of Universidade Católica Portuguesa, reveals the five main trends in the Fintech industry for the coming years.

The report also highlights the impact that the pandemic had on the adoption of fintech solutions, in favor of access to traditional financial institutions, mainly due to the role of digital transformation in sectors that were once more conservative.

“Bynd VC seeks not only to follow ecosystem trends, but also to contribute to this type of analysis that helps us to understand and assess the global investment landscape in different sectors. The Iberian market has enormous growth potential in the fintech area”, explains Tomás Penaguião, from Bynd Venture Capital.

“This analysis, developed in conjunction with our partners at Universidade Católica, shows us that, despite the majority of startups being based in the US, Europe is starting to accelerate its pace and develop excellent projects in the industry”, he adds.

Markus Duczek, from the Catholic University's Venture Capital Club, is also optimistic about the future of this technology area: “We see the Iberian Fintech industry as a promising investment opportunity, but also as an attractive area to work”.

For this responsible of the Venture Capital Club, there is a huge potential that is awakening in the sector. “With more than half of the Portuguese Fintech companies still in the pre-seed or seed stage, these companies are today an opportunity for financial growth, but also personal and a great career opportunity. We hope to see some relevant startups emerge in the Iberian market, especially with solutions based on data and AI and machine learning”.

Five Macrotrends for Fintech

The study groups trends into five macro-trends, highly linked to sustainability, as the “green” financial ecosystem is growing, concerned with reducing the carbon footprint and making transactions eco-friendly.



1. Process Digitization
With the pandemic, the demand for digital processes that allow greater financial autonomy, namely in opening accounts and using digital signatures, grew. For this reason, Artificial Intelligence (AI) and Machine Learning (ML) emerged as assistants to chatbots, analyzing the best financial solutions and detecting fraud.

In this field, the British Metro Bank and the German wefox stand out in the European fintech scene. Linked to this trend, another one emerges: 100% Digital Banks. They offer flexibility, innovative services and more competitive prices, therefore attracting people looking for simple solutions to manage their finances.

2. Cybersecurity
With the increasing digitization, customer safety has consequently become a concern, and AI services reappear as an answer to this problem, looking for the best possible solutions. Here, it is the Portuguese Fluxe Insurance Software, which develops customer-centric digital tools, aligned with the challenges of the insurance industry and oriented towards business agility and profitability, that stands out.

These digital financial decision-making processes require an efficient regulatory system – RegTech, which, in addition to protecting data, ensures financial stability.

In this context, Fraudio is also worth mentioning, a Dutch startup co-founded by Portuguese João Moura, focused on helping companies fight fraud and financial crime in payment systems through artificial intelligence and machine learning, which recently announced a new round of investment in the value of 3M€, in which Bynd VC participated.

3. Financial Literacy
Financial Literacy gains, with the growth of the fintech industry, a strong ally, as the digital solutions appear, being completely essential for the fintech industry. Institutions are already starting to create technological solutions for financial coaching, which make it possible to create stable and lasting connections with clients.

An example of how digital transformation makes it possible to impact younger generations is the Spanish e-learning platform Payflow, which helps to achieve financial “well-being”.

The growth of Financial Literacy also presupposes a greater willingness on the part of people to invest their money. Open Banking appears as the ideal solution to help customers manage their accounts, also providing a closer relationship between banks and fintechs.

In this area, TTR stands out, a premium technological-financial platform that offers transactional data and market intelligence in real time, allowing professionals to anticipate opportunities and make better decisions.

4. Alternative Financing
Alternative Financing is also a trend for the coming years. Today, there are alternative forms of lending to the traditional ones, such as Peer-to-Peer (P2P), a solution that brings investors directly to borrowers, Crowdfunding, in which a large number of individual investors lend money to entrepreneurs, and by and finally, income-based financing, which fixes an amount that will be returned taking current income into account.

The startups Prosper, Kickstarter and Uncapped, respectively, stand out in this field, as well as Ritmo, a Spanish startup participated by Bynd.

5. Integrated and Secure Payment Solutions
Cryptocurrencies have gained great prominence at a global level, during a pandemic period, and are beginning to be used by large companies as payment methods. It is here that concerns about data security arise again, giving rise to solutions such as the French Ledger, which offers security systems.

On the other hand, it is proven, once again, that fintechs are transforming the industry. The growth of Banking-as-a-Service (BaaS) requires the creation of highly specialized solutions, highlighting, therefore, Integrated Finance. These will simplify financial processes and incorporate them into non-financial business models.

The study also outlines the scenario of the global, European and Iberian markets in these areas and points out the main projects that have developed solutions in this sector.


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