On the back of a technology revolution that has seen blazing fast internet speeds, sophisticated mobile devices, and increasingly smarter AI, the financial industry has undergone immense disruption. For the better part of this decade, financial technology, or Fintech companies have creatively introduced emerging technologies to institutionalized financial services, producing apps that have redefined the way people interact with money and banking.
The boom has been so great that in the fourth quarter of 2015, the value of Fintech investments reached a staggering $25 billion. All across the world, the digitization of finance have not only increased the number and geographical reach of monetary transactions, but also given SME’s and individuals crucial access to funding and micro-transactions that were always out of their reach.
In this article, we look at six innovative Fintech firms from each continent and learn how their services are impacting their respective corners of the globe.
South America – IOUU
IOUU is a Brazilian peer-to-peer money lending services that employs superior tech and increased efficiency to offer loans faster and cheaper than their traditional competitors. Their strategy is to target the niche of micro and small businesses that often find themselves underserved by the big banks.
“We connect businesses who want to grow with investors who want to lend. By removing the complexity of dealing with other lenders, businesses can access finance in as little as 2 weeks and investors have the potential to earn better returns by lending to them,” Bruno Sayão, CEO and Founder of IOUU.
Launched in 2016, the business is already proving to be a huge success. After only two months in operation, IOUU had R$ 2.3 million of credit applications and R$ 910 thousand from interested investors.
While there is always a risk involved in any peer-to-peer lending business, Sayão believes their superior tech can put investor’s minds at ease. “To mitigate risk to the maximum for the investor, our technology can verify in more than 500 public and private databases the credit history of the companies that will be published for capture in the platform.”
Europe – Epiphyte
Epiphyte is a company that has built its success on the global demand for international currency transfers by bridging traditional currencies with the increasingly popular Bitcoin technology. What does this mean? Through Epiphyte, consumers are able to convert any traditional currency to Bitcoin, transfer it anywhere in the world, and then convert the Bitcoin into the currency of the destination country.
The company describes their mission as “…helping the financial world take advantage of recent advances in network technology, including the use of cloud and blockchain technologies. We believe that by making financial transactions as fast, inexpensive and direct as other digital services in the Internet age, everyone stands to benefit.”
“We have a technology that’s fundamentally capable of fixing a huge amount of these problems. It’s able to provide low-cost access to basically anyone in the world,” founder and CEO Edan Yago told Fintech Finance. “But for it to be adopted, it must be able to integrate with the existing financial system. We see it as our mission to work with financial institutions to make them better, and to utilise this technology to bring out these benefits.”
In just a few short years of existence, industry peers have already taken note of Epiphyte’s innovative services, and the company was awarded the 2014 Fintech Startup of the Year and BBVA New Banking Innovation prizes.
Africa – Branch
It is commonly believed that Africa is the largest unserved market in the global financial community, with an estimated 330 million adult Africans who have no access to traditional financial services. Branch, a company based out of Nairobi and San Francisco, seeks to address this by making micro-loans more accessible than ever before.
The key to their success is not just targeting an underserved market; they are overturning the applecart in how loans have historically been granted. Branch enables customers to use the data on their phones to qualify for a loan instead of through an existing credit score.
The service accesses a cross-section of customer data including:
- Handset Details
- SMS Logs
- Social Network Data
- GPS Data
- Call logs
- Contact lists
“Your digital trail can establish your financial track record,” Branch founder Matt Flannery explained. “Branch is a bank branch in your pocket. Our mission is to offer world class financial services to the mobile generation. We use machine learning to make credit decisions delivered in seconds. We ask borrowers to trust each other through an app to encourage and guarantee timely repayment.”
The micro-loans range from $2.50 to $500 and according to Branch, 75% of the loans are used to start small businesses, mainly in Africa. Flannery believes the reasons this service has been welcomed across Africa are multi-fold.
“The need for modern, digital financial services is overwhelming in emerging markets. A digital MFI is unconstrained by geographic boundaries. A digital MFI can extend extremely small loans, vetting millions of people at low cost. A digital MFI does not require costly collections visits by loan officers — costs which inevitably get passed on to borrowers.”