U.S. Fintech Companies' Global Vendors

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U.S. Fintech Companies' Global Vendors

Financial technology (fintech) is a growing industry that aims to provide standard financial services using the technology and at-home solutions. In order for fintech companies to reach their goal, they must innovate to remain at the top of the industry; ensure secure transactions in online banking, loans, and insurance situations; and maintain customer satisfaction this often requires fintech companies to use vendors that can provide each specific service.

FINTECH USES

  • Fintech is used to provide financial services using, "internet, mobile devices, software technology or cloud services."
  • The following are examples of services provided by Fintech: Crowdfunding platforms, cryptocurrencies, mobile payments, insurance, robo-advising and stock-trading, budgeting, and banking apps.

VENDOR CATEGORIES

Technology Innovation

  • 1. Machine Learning — Machine learning can be used by most fintech companies to extract patterns from data which can then be used to create risk and demand models, detect fraud, to automate insurance claims, and to help underwrite loans.
  • 2. Artificial Intelligence — AI can be used to create chat bots for 24/7 customer service and as robo-advisors in stock or investment situations.

Data Sharing

  • 3. Application Programming Interfaces — APIs are used to ensure banking interconnectivity and communication between applications.
  • 4. Integration services — Integration with several apps such as calendars, separate bank account apps, or other budgeting apps is becoming more important for customer satisfaction and fintech adoption.
  • 5. Data banks — Secure data banks are used by companies such as You Need a Budget to ensure secure data storage and interdevice data transfer.

Security

  • 6. Blockchain — Blockchain is a secure and transparent way to track transactions used by many fintech companies.
  • 7. ID verification — Identification via photo IDs or biometric features is being used more often to ensure standard age limits are met in mobile transactions and to increase sign in security or credit card access via mobile applications.
  • 8. Bank verification — Bank verification is used by many fund transfer apps such as Venmo to ensure all account information is correct.
  • 9. Radio Frequency Identification — RFID is used in mobile payment apps to verify and secure mobile transaction using NFC.
  • 10. Fraud detection — Despite initial security checks, fraud detection after initial security measures have been passed is still a necessary component of fintech companies to ensure data security.

Insurance

  • 11. Internet of Things — The IoT can be used by fintech insurance providers to track car data or other online devices to provide discounts for safe operation of insured items or to determine fault in the case of accidents.
  • 12. Drone interfaces — Insurance companies can use drones to evaluate properties for damage and to determine rates.

Loans

  • 13. Property Management — These services are being used by fintech companies such as Nova Credit to assemble an international database of property and payment histories which allows them to provide loans to immigrants without a US credit history.
  • 14. Underwriting — Underwriting services are more often being exported to Machine learning, however, special circumstances sometimes still requires fintech companies to use traditional manual methods.
  • 15. International credit standardization — This service is used by Nova Credit to provide immigrants without a US credit record an opportunity to obtain loans for housing or sign rental agreements.

Customer Satisfaction

Infrastructure

  • 18. Core Banking Systems — CBSs are fintech companies themselves and they provide other fintech companies with a suite of basic banking infrastructure so the companies do not need to source each individual service.

ADDITIONAL RESEARCH

  • This report provides a relatively complete picture of the vendor categories used in fintech. Further research could be done on the scope of each category based on the clients needs.
  • Fintech is developing rapidly and another report could be done on future technologies that may be employed in this sector such as virtual reality banking.

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