Why Is Fintech Attracting Such High Investments?

April 18, 2015

2:00 pm

We can write a lot about technological developments of 2014 and new launches being expected in 2015. However, we should never miss out on the prospective growth of a field or industry on the basis of technology around us. Financial technology has silently seeped into our daily beings like water in a plant. And soon, given the growth of the industry, we will grow more and more familiar with apps on our mobile phones that introduce us to peer to peer lending, electronic payment options and trading platforms. Point under focus here is financial technology, the industry that is all set to boom.

Who Invests In Fintech?

There are many types of industries that investors see fit to invest in. One rising industry that has gained priority is Fintech comprising of firms trading in forex and insurance. Statistics show that investment in Fintech firms has tripled in the year 2014. Investments went from $4.05 billion in the previous year to a total of $12.2 billion. While Fintech firms operate on a global scale, the United States remains as one of the most successful Fintech investment markets. European investments are not far behind, which leads to the projection that growth in the European market may soon overcome the American market.

The Secret Behind the Growth

For anyone who is monitoring Fintech growth, either through their own market analysis channels or on forex trading platforms such as Alvexo, it is not uncommon for one to question what is exactly causing the growth. A few of the most prominent reasons is that there has been an increase in financial technology funding, making it one of the most popular markets for startups. In addition to this, many banking firms are partnering with the industry. This leads to a strong backing for accelerator programs and the hosting of innovation conferences.

To add to the above reasons, Fintech is also attracting investments due to the push by traditional retail banks to refer customers to the P2P lenders. These lenders provide loans or allow customers to make quality investments. It seems that this push has been widely successful. In one survey conducted, it showed that 80% of banking respondents saw Fintech as a “valuable way to bring new ideas into their business. Moreover, many would like to go into new business models, even if it meant giving up current revenues.

 

Conclusion: What Else is in Store in 2015?

 

The Fintech industry seems to be moving in a positive direction. The financial technology industry has been largely successful because of the following aspects:

  1. They succeeded in easing payment processes,
  2. They have prevented the occurrence of fraud,
  3. They have also done an excellent job at financial planning and
  4. They have been helping users successfully save money.

 

As 2015 starts to gain traction, it is highly expected that the Fintech industry is going to continue to prosper. There are numerous companies that are worth watching and investing in as they grow to become some of the most successful in their field. You can choose the right businesses by monitoring them on your own financial platform and keeping track of their performance for a short period of time. While we wait for more good news from forex industry, watching out for fintech growth should be up in your cards right away.

 

Image Credit: Flickr/OTA Photos

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Allan Watson worked for years with an internet marketing company and eventually concluded he had learnt enough to venture out on his own. He is considered an expert in SEO by many, which is probably because he spends hours reading on it and updating himself.

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