SAP BLOG The Value of Investing in Fintech Industry

SAP Blog

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22 Ara 2017
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Modern technology is one of the driving factors in the evolution of the business world. One such technology that now has its own following of keen investors is finance technology or fintech. This refers to the application of modern technology, usually in software and other forms of technology, to develop and deliver financial services. PayPal is the most popular example among the fintech companies in the world, with it being valued at $50 billion in 2017.

Fintech is still pretty much in its infancy, which is why it doesn’t come as a surprise that many of its users are also startup companies. As more startups are founded every day, with each of them establishing their mark in their industry, one thing that should be focused on is the resources that they use to propel themselves to success and fintech is among those resources. So it is to be expected that startups will also invest in the future success of fintech. This interest in the fintech industry is likely the factor that has boosted fintech’s growth over the past few years.

How has the global market for fintech investment been doing in the past few years?

More venture capital investors have diverted their interest from mobile technology to fintech, among other technologies. They focus more on how the business and financial sectors in the global market can implement fintech in their business of making money. But these venture capital firms may lean more towards fintech companies with an established business model that follows regulations and have years of experience in the financial industry.

For investors who are looking to make money in the fintech industry, the best way to get their money back and some more is to work with venture capital firms who have a solid portfolio of fintech companies and a strong success record. As an investor, you might be interested in how this sector is bound for growth. From only $930 million of global fintech investments in 2008, it jumped to $3.9 billion in 2013 raised by private fintech companies. It grew to $12.2 billion in 2014 and to $19.1 billion in 2015, according to a report by KPMG and CB Insights. KMPG’s report further showed that the global fintech investment rose to $31 B both in 2016 and 2017. Now, are you convinced to take out some small personal loans online to start investing in the growing fintech industry?

The fintech industry does not seem to be stopping its growth anytime soon as the KPMG Pulse of Fintech report showed that in the first six months of 2018, the industry already saw $57.9 billion being poured into it globally. This should be all the more reason for you to use your loan to invest in fintech stocks.

Why the market has increased demand for fintech

If you are concerned about the staying power of financial technology, don’t worry. It is going to be around for long. One good sign would be how traditional financial institutions are now investing in technology that allows customers to upload documents and process loan applications online. This means that fintech is going mainstream and that it has progressed from its earlier innovator phase to the early adoption phase.

As large banks look into using technology that supports online applications for small business loans, it fuels the fintech industry’s growth. They had to adapt to the changing nature in which consumers use products and services. With more people using smartphones and the Internet for almost everything that they do, banking has to change. Just like how Amazon changed the retail industry with the help of the Internet, fintech is also here to stay and grow, causing the banking sector to transform as well.

Where to invest in fintech

Among the best fintech stocks to pour your money into in the next decade are the following:

The company assists financial institutions in making the switch from traditional to digital technology, helping its stock owners get constant positive return since 2008.

This popular online payment system provider has 218 million users and is among the leaders in the $35-billion person-to-person payment business sector and in the $3-trillion online digital payments industry. Both industries are projected to reach $335 billion by 2022 and $8 trillion by 2002, respectively.

In 2017 alone, it managed to raise $175 million through IPO and $4.2 million more from a private placement. While it merged with Florida-based wire transfer provider Intermex, which has assumed management of the business, the new management’s goal is to continue growing Fintech Acquisition.

It gained attention for owning majority of Sprint Corp, the fourth biggest wireless carrier in the US, but its fintech investments are also boosting the company’s assets. It has recently been reported to have developed an interest in investing $1 billion in Uber Technologies Inc. It recently poured $1 billion in Social Finance, an online student loan lender, and $250 million in small business lender Kabbage.

This mobile payments company allows small businesses to open a business and give it a try. As long as Jack Dorsey does a good job of running this company, which has transformed itself into a money-making organization, then you can be positive about the future of this stock.

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