Top FinTech Trends, Fresh From Finovate Europe 2016

By Business.com Editorial Staff
Business.com / Finances / Last Modified: February 22, 2017

Finovate Europe is an international conference focusing on FinTech. Here are five disruptive trends discussed at this year's gathering.

While the term "FinTech" might at first bring to mind a startup pitch for the TV show, Shark Tank, it’s actually, as noted in the Trulioo blog, become a widely used shorthand in the business media for future trends in the financial industry enabled by new technologies.

This is somewhat imprecise, however. FinTech more specifically refers to technologies, and the startup companies that develop it, designed to disrupt existing established financial systems.

Think mobile payments, peer-to-peer lending, and crowdfunding.

Financial Technology brainstorm bubble

Not so long ago, the word didn’t even exist. (It’s so new spelling isn’t standardized, appearing in various sources as “fintech,” “FinTech,” and “Fintech.”)

But as Jens Munch, Managing Director UK at iZettle, points out, “[Its] importance cannot be denied. One thing it is certainly not is a buzzword. FinTech is an area that is radically changing how we live as a society and how we do business professionally.”

Indeed, according to a survey of some 10,000 “digitally active” users worldwide conducted by global consultancy EY, slightly more than 15 percent have used at least two FinTech products during the last six months of 2015, a number expected to double in 2016.

Accenture’s “The Future of of FinTech and Banking” report notes that investment in FinTech grew globally by 201 percent, compared to 63 percent in overall venture-capital investments, in 2014.

Financial writer Mikey Tom notes the continuation of this trend in 2015, with $7.6 billion capital invested compared to the previous year’s $4.7 billion.

Further evidence that FinTech is now firmly established in business jargon and technospeak is that it has spawned additional variations, notably “Finovate”, to describe an international conference held in London last February.

Held since 2010, this year Finovate hosted 72 FinTech companies and their product and service innovations on display to an international audience of 1,500 attendees from 22 countries of the five continents.

Related Article: What is FinTech and What Does it Mean for Small Businesses?

Finovate Europe Ad

Here’s a summary of the top five trends that were discussed at Finovate Europe 2016.

1. Robotic Financial Advisors  

Ever get the feeling while talking to your financial advisor that the responses you’re getting are a bit robotic? That’s due in part to a growing reliance on computer models.

FinTech eliminates the middleman and gives you direct self-serve access to product and investment recommendations based on artificial intelligence software programs.

One example that's about to launch is called Investify.

2. Predictive Analytics to Reduce Credit Losses

Here’s company that takes pride in not only relying on robotic software, but bills itself as "the mother of all robo advisors.”

AdviceRobo is just one of a number of new ventures that provides analytic tools to predict probabilities of default, bad debt, prepayments, and lender outflow, to determine credit risk and detect fraud.

As Capital One director of data engineering Il Sun Yoo puts it, “The ability to crunch more data, faster, will lead to improved financial health.”

3. Mobile Payments

Rima Perelmuter notes in Venture Beat that, “Headline statistics are that mobile banking and mobile commerce continue to grow.

Sixty-nine percent of mobile media users carried out a banking activity via mobile, while 66 percent have carried out some form of transaction.”

She adds that, “Convenience and immediacy are the key drivers for the majority of developed markets, although there is no uniformity and no one size fits all.” Africa and Asia in particular are leading growth areas of mobile money, to the point where they have “leapfrogged established economies and [are] fast becoming the norm.”

Related Article: How FinTech is Changing Business (and Bank Accounts)

4. a Better Customer/Machine Interface

Mobile is also driving development of better customer experiences with device use for financial transactions, notably voice navigation and two-way video.

As the Harvard Business Review reminds us, “Interactions with customers, and the customer experiences that result from those interactions are, for many businesses, the sole remaining frontier of competitive advantage.”

5. Social Trading

“Banks and investment firms were late arrivals to the social media scene, but now they’re leading the way,” points out Kimberly Palmer in U.S. News & World Report.

New social media tools from Finacle and SwipeStox provide forums to share investment strategies.

Related Article: Finance, Meet Your New Match: FinTech Trends to Watch in 2016

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