The next decade will be the era of massive fintech investment, driven by a new investor mindset that has come to recognize that growth comes from disruptive innovation, market share gains, and corporate strategy. The mantra of the next decade is value creation through intelligent solutions. There are many intelligent solutions being developed and many more in the pipeline. We simply have too many opportunities to ignore. The following will discuss some of the best innovations on the cutting-edge of financial technology.
The next wave of fintech investment will come via venture capital investment in the purchase of micro and small cap companies. Venture capital investment in these types of companies allows investors to buy a portion of a company at a significant discount to the full price, with the understanding that they will not become publicly listed. This provides a runway for early investors and a way to avoid over-incurring debt when the company goes public. Venture capitalists also seek out companies offering platforms for trading micro and small cap securities, with an eye toward capturing early and unique Internet market opportunities. These platforms are emerging as new sources of consumer finance and other fintech investment are created.
Another wave of fintech investment will come via the development of new systems for online payments. Traditional methods like credit cards have been replaced by sophisticated electronic means including card payments, mobile phone payments, and internet-based “brushes” that help consumers keep track of their spending. These systems can provide new avenues for fintech investment through the development of new cyber security measures that allow consumers to transact without fear of fraud or theft. Some of the best investments in this sector have already been made, and expect to see more such investments in the future.
One of the primary areas of fintech investment in the next decade will be in the area of digital payments. Cryptocurrency firms are developing new digital payment systems that allow consumers to securely shop on the Internet. Other companies are creating secure business models that incorporate digital payments to increase profits. For instance, one of the largest grocery store chains is currently testing a service that allows customers to make “smart purchase” purchases with their groceries. The digital payments are protected by encryption technology that transmits details of the transaction to a data center managed by the company.
Another area of fintech investing that looks promising is in the area of digital insurance. Several insurers have created software applications that allow users to track and analyze several different health insurance plans at the same time. The potential applications of these types of programs are vast and include home and automobile insurance plan as well as individual and family coverage. This type of application has the potential to dramatically enhance the profitability of each individual plan.
The world of venture capital is also currently seeing a large number of investments into biotech companies. In recent years, a number of high profile venture capitalists have made large personal investments into companies providing healthcare, data management and online shopping options. Some of these investors have chosen to specifically focus on specific areas in which they see great opportunity. Two of these areas include biotechnology and health care. These sectors are growing at a rapid pace, and companies specializing in either of these fields could provide investors with a significant return on their initial investment.
Another area where fintech companies are looking for capital investment is through investment companies that deal solely in digital payments. These investment groups typically provide deals that utilize new and emerging technologies to allow investors to receive funds in a simple online transaction. This transaction can be completed in a matter of minutes and requires no further investment from the investor. Most investors are able to receive the funds they are seeking within twenty-four hours.
As you can see, there are several opportunities for investors in the realm of fintech investment. In recent years there has been an increase in the number of companies providing this type of service, and in fact the amount of investors searching for financial industry related investments has dramatically increased. The future for this sector looks very bright, and companies such as Square and PayPal offer completely innovative systems that are changing the way we pay our bills and secure our financial information online. With the right investment, even more incredible opportunities await those who are willing to take a chance and develop new business models to provide consumers with the ability to make their purchases online.