The financial technology marketplace is booming as startups make an effort to disrupt every area of money. The growth the sector provides enjoyed this year is anticipated to continue unabated in 2019, with one forecast pegging the compound annual development rate at 74. 16% from 2019 through 2025.
When it comes to the areas startups will be aiming to disrupt it runs the gamut from banking to insurance company. And while some industries might find more growth than others, traditional financial services companies ought to brace for a further shakeup in 2019. With that in mind, market players across the fintech variety weighed in with their forecasts for the fintech market in 2019.
Insuretech Moves Mainstream; Spurs M&A
With regards to fintech, insurance is one area that is slowly being interrupted. But if Victoria Treyger, Controlling Director at Felicis Ventures’ prediction proves true 2019 will be the year insuretech moves mainstream. “We will see changes in how ‘insurance’ is sold wherever it becomes bundled with other house services especially apartment leases and home sales, ” said Treyger. “Businesses might find a sharp increase in all types of industrial insurance that they can buy straight online rather than through agents. ”
One area the trader thinks will see “dramatic growth” is in cyber insurance since it becomes commonplace for businesses to obtain this type of coverage. As cyber criminals grow more sophisticated and data breaches happen at an actually faster pace threatening an reputations of any size business, companies will want to guard themselves. Treyger said an insurtech market is also likely to get a lot of interest by investors in the New Year. Be prepared to see more mergers and so acquisitions as the traditional insurance firms “snap up the insurtech businesses in order to drive growth and acquire the direct to client distribution channel, ” the lady said.
Online Lending Development May Dip But Fintechs Will Adapt
Online financing is a more mature area of the fintech market, but that doesn’t suggest it will see a slowdown next year. And that’s even with a particular backdrop of macroeconomic uncertainness and a growth rate that may see year-over-year declines. Vince Passione, chief executive and owner of LendKey, the financing platform, and online market, predicts fintechs in the financing space will create white-label financing platforms and will develop application as a service relationships to banks and credit unions as an alternative revenue stream. What’s more, Passione predicts fintechs can make the loan origination process actually faster in the New Year. “Fintechs will invest in greater motorisation to replace manual processes, causing a faster loan origination procedure, ” said the executive. “Automation removes friction for the borrower from the application process and reduces the chance of human error in processing the loan documentation. ”
Fintechs Will Stay Private Longer
This year saw a lot of technology companies, particularly in the software industry, tap the public markets via initial public offerings. Airbnb and Uber are expected to launch IPOs in the New Year, but they could be the exceptions. There are expectations among some that fintechs will stay private longer. “Capital markets data show that the median age at which companies go public has grown from 6. 3 years in the 1980s to 10. 2 years in this decade, ” said Kelly Rodriques, Chief Executive of Equidate, a stock market for private tech companies. “In 2019, CEOs and their boards will continue to balance the needs of a wide range of stakeholders as they evaluate whether and when to go public. ” With staying private longer becoming an attractive path for fintechs, Rodriques predicts fintechs will face more pressure to ensure liquidity, which will be critical for the startups to sustain their momentum.
Cryptocurrency As A Payment Method Will Grow
To date cryptocurrency payments have been a niche application with Bitcoin failing to take off with the masses. But in 2019, Sanja Kon, vice president of global partnerships at crypto-commerce company UTRUST thinks there will be a rise in cryptocurrency payments as more customers get educated on the advantages of using digital currency. She pointed to lower transactions costs as one of the big benefits. Kon predicts biometrics technology will be embraced in a bigger way in 2019 as mobile device adoption continues to grow as will the number of peer-to-peer payment platforms available to customers. “Peer to peer payments can frequently grow in double numbers next season, driven by the wide-spread requisition of smartphones and relaxation offered by the P2P products, ” said Kon. “Venmo reported that it prepared on top of $35 billion worthy of pointing to transactions in 2017, providing a 95% increase in regarding monthly payment volume vs the prior same year. ”