Today, The Pulse of FinTech report – authored by KPMG and CB Insights –revealed that in 2015, $13.8bn was invested in FinTech (financial technology) companies around the world. This marks a huge, 106% increase in investment from 2014.
So, it’s official: FinTech is a hot investment, and both traditional corporates and the more egalitarian crowdfunding platforms are getting in on the action. According to Business Insider, Spanish bank BBVA recently rolled out a $150 million (£105.5 million) fund to invest in FinTech startups. Santander also has a $100 million (£70.3 million) fund.
But what makes the upward trend in FinTech investment most fascinating is what it reveals about the changing face of personal finance – AKA how it’s going to change your life.
Last week, app-based bank Mondo crowdfunded £1m in 96 seconds (NINETY-SIX SECONDS!), earning Mondo the title of the fastest equity raise ever, and taking its entire raise up to £6m.
Mondo is part of a new crew of movers and shakers in Money Town – the ‘neo-banks’. Mondo’s product is a pre-paid debit card tied to a mobile app. The app feeds back smart data on how you spend, helping you to better manage your money. Pretty cool.
Mondo – and its competitor, Atom – are slick, techy responses to the criticism that has mounted against traditional banks in recent years. The argument goes like this: the advent of online banking has resulted in the closure of physical branches – ergo, banks have made savings in operational costs with the growth of digital. Yet, these savings are not being passed on to customers.
Mondo & Atom capitalise on their digital-only status by providing you with cheaper alternatives to traditional banking options. However, rein in your excitement a little bit – both neo-banks aren’t available to the general public just yet. But soon, we’re assured. Soon.
FinTech companies are pretty good at taking small functions of banks and making them better. Take TransferWise, for example, that raised £40m last year. TransferWise took the rusty old banger that is international payments and turned it into a Tesla.
By using a Peer to Peer model, TransferWise makes international payments smarter, faster & cheaper.
If you’re a business owner, check out Funding Circle, who raised £105m last year. Funding Circle connects creditors with businesses, giving individuals the opportunity to lend to businesses – a mechanism traditionally performed by high street banks.
The Pulse of FinTech report reveals the waves that FinTech companies are making, both in the UK and abroad. FinTech companies are polishing and refining the retail functions of banks, diversifying personal finance options for individuals.
The result is a brighter future for money management – something that we’re pretty excited about at Bud. Use our cool little platform to take charge of your finances with the smartest, money-saving FinTech products.
Adopt the tech and do it better.