Welcome to the world of fintech startups – these guys are the new wizards in town, whipping up digital solutions that give traditional banking a run for its money. They're not just making waves; they're causing a tsunami in how we handle our dough.
Beyond the razzle-dazzle of catchy interfaces, there's real, practical appeal here. These fintech newcomers are slaying it by unlocking value for consumers like never before, giving power back to the people where it belongs – their wallets. Let's get stuck into how they're shaking things up.
Credit Where Credit's Due: Fintech's Lending Revolution
Alright, let’s get real about loans for a second. They’ve been a necessary evil since, like, forever – but fintech is flipping the script. These startups are taking the "oh no" out of personal loans with algorithms that would make your old bank manager blush. Their whole deal? Pairing you with lending options that suit your life and budget without all the hoopla and red tape.
This isn't just about getting cash faster (though, let’s be honest, that alone is pretty sweet). It's also about democratizing access to credit. Got a less-than-stellar credit score? Traditional banks might show you the door, but fintech firms could still hook you up with reasonable rates. They're assessing risk using Big Data and even social media – which means it's not just what you earn but how you handle your finances that counts. For consumers, this can mean more approval chances and personalized terms that don’t handcuff you to high-interest despair.
Investing With a Side of AI: The New Financial Sous-Chefs
Gone are the days when investing was exclusive to folks who had a hotline to Wall Street. Fintech startups have tossed that old playbook out the window and are inviting everyone to the party – yeah, even if your investment knowledge is pretty much zip. They've got these snazzy robo-advisors powered by artificial intelligence that do the heavy lifting for you.
Think of them as your financial sous-chefs – they prep your investment meal based on how spicy you want it. You say if you like it mild, medium, or hot (metaphorically speaking) when it comes to risk, then these digital geniuses curate a diversified portfolio tailored just for you. And since they're machines, they're working round-the-clock, constantly optimizing your investments for fees that don't suck up your returns.
This blend of tech and personalized strategy makes cracking into markets less "yikes" and more "yeah!" – without emptying your bank account for professional advice. AI is even being applied to lending decisions, and while there are concerns, this move is a good one on the whole.
Tap Into Savings: Fintech's Frugal Magic Wand
So, you love your Starbucks, but your bank balance doesn't? Enter fintech startups – they're transforming penny-pinching from a chore into something you might enjoy. How? Well, picture this: apps that auto-magically round up your purchases and stash the change. It’s like finding coins down the side of your couch, just turned up to 11. Before you know it, those digital nickels and dimes bloom into a nice little emergency fund or vacation cash.
But that's barely scratching the surface. Some of these savvy platforms dish out personalized tips to help avoid fees, snag better deals on bills, or just give you the lowdown on where your money is vanishing every month (spoiler: check that snack runs). That also means it’s a breeze to learn about GreenState saving rates and compare packages from all sorts of other providers in this same space. In essence, they're like that friend who’s always got killer money advice – except they fit snugly in your phone.
Your Wallet's New BFF: Budgeting Bots
Let's break it down: budgeting is about as fun as a root canal for most of us. But fintech startups? They're on a mission to make it cooler than the other side of the pillow. Enter budgeting bots – your personal finance gurus that live on your smartphone.
These nifty helpers track every latte and impulse buy, no judgment – just smart insights into where your cash flow’s heading (spoiler alert: probably towards more lattes). They categorize expenses like a boss, so you see exactly where you’re ballin' or bungling with your budget.
Moreover, they’re master nudgers, sending you gentle (or not-so-gentle) reminders when you're about to blow through your budget on another pair of sneakers. With these tools on deck, sticking to a spending plan stops being a snooze fest and transforms into an almost game-like challenge to beat your personal best – savings style.
Wrapping Up
So there you have it, folks – the fintech revolution is like having a financial Swiss Army knife in your pocket.
These startups are not just making noise; they're changing the game by putting control, clarity, and a bit of fun into our financial lives.
With them in your corner, it's less about sweating the small stuff and more about watching your financial health level up.
The rapidly expanding tech startups industry is progressively becoming the future and face of the business world and those who want to nurture their inner Elon Musk are increasingly travelling abroad to emerging tech hubs. Although, Silicon Valley still remains the undisputed destination for startups and venture capitalists, a new crop of global tech hubs are rapidly expanding to match the talent oozing out of the Bay Area.
A recent study by SmallBusinessPrices.co.uk has revealed the best rising tech hubs for people who are seeking entrepreneurial opportunities. The research took into account the average internet speed, the average business valuation, and cost of living, among other metrics.
1. Boulder, US - With the second highest internet speed, Boulder has over 5,000 business investors and an average business valuation coming in at $4.3 million. Boulder is a prime location for those wanting to start their next tech-startup.
2. Bangalore, India - In spite of an average internet speed of 11mbps, Bangalore has over 6,000 investors and an average business value of $3.4 million making it one of the best locations on the Asian continent.
3. Johannesburg, South Africa - As one of the most affordable tech hubs for young innovators, Johannesburg boasts reasonable average monthly rent cost of $416. The city has an average business valuation of $3.6 million and over 1,200 investors.
4. Santiago, Chile - With 1,201 startups, Santiago is considered as a new home for tech startup companies, making it a great destination for those in the South American continent. The city has an average monthly rent cost of $372, making it the second cheapest city to live behind Colombo in Sri Lanka.
5. Stockholm, Sweden - Named the 9th happiest country in the world, Stockholm is the capital of Sweden and ranks number 5 for the World's Rising Tech Hubs. The city also scores highly for its internet connectivity with the second highest average internet speed of 42mbps behind Houston, Texas.
Digital Hotspots
Connectivity is a non-negotiable in the 21st century working world, especially for tech startups. Although Houston has only having 322 public wifi hotspots, the city number one for the highest average internet speed of 65 mbps. Stockholm offers some of the highest internet speed outside of the United States at 37 mbps.
Business
Recently, there has been growing trends of millenials moving abroad for greater work opportunities. Bangalore is great for young innovators as it call home to over 7,500 startups and the largest amount of investors (6,236). While Boulder in Colorado has the highest average business valuation of $3.4 million.
Living
The cost of living is one of the biggest concerns for many young people especially when the majority of their capital is being used to fund their venture. Helsinki has the highest average monthly rent cost of $1,548, with Tel-Aviv ($1,338), and Boulder ($1,250) respectively. Whereas Lagos has the lowest infrastructure score of 2.4, with the highest being Stockholm (4.27).
Although many still regard cities such as Silicon Valley as one of the few locations where entrepreneurs can develop their untapped entrepreneurial talent. This new study gives insight to the best alternatives rising cities to live and work for innovators outside the overcrowded Bay Area.
All beginnings are difficult. Studies show that, on average, nine out of ten start-ups fail (1), and the shark tank that is the financial industry isn’t exactly renowned for allowing tender start-up shoots to flourish. The risk of failure and the fierce competition should not, however, deter you from launching your own FinTech. Instead, you can learn from others’ mistakes. Anyone seeking to start a successful FinTech company should carefully examine why others fail and avoid making the same mistakes.
So how do FinTech entrepreneurs meet the demands of a competitive and turbulent market, while trying to make it out on top? Tobias Schreyer, Co-Founder of PPRO Group reveals for Finance Monthly.
- Thoroughly analyse your market
The crux of any start-up is the business idea. The fact that an idea initially looks promising, however, is no guarantee that it will work in practice. The key here is for FinTech start-ups to begin analysing the market as early as possible to determine whether there is an appropriate and suitably large target audience for their business. By far the most common reason for the failure of a start-up is that there is no market for their idea. You must know the size of target market, what the competition is like, and what prices comparable products and services are fetching. Never ignore market analyses and align your business plan precisely with the results.
- Secure your funding in advance
Even (and sometimes, particularly!) FinTech start-ups want to attract financial backing. As with any other start-up, the issue of funding is right at the top of every FinTech start-up’s list. This issue can be roughly divided into two sections. The first is self-explanatory and covers the considerations which should be part of a traditional business plan and the questions which should ideally be resolved before the company is founded. These include things like how much capital is needed, the outgoings expected, and the potential profits. This is where you should investigate loans for company founders or appropriate grants and subsidies. The second part of the funding issue is more FinTech-specific. As, in most cases, you will be competing with banks or other FinTechs with a lot more money, so attracting partners and potential investors early on in the process is important. You should look for people who are excited about your idea and ready to invest.
- Always keep an eye on your finances, particularly post-launch
After the business idea, finances are the highest priority for any start-up, including FinTechs. This is a very broad subject. Not only should the company be liquid, it should also have a handle on accounting and taxes. Seemingly simple tasks like setting up a business bank account or applying for a company credit card can be a challenge initially. What if you have a business trip coming up, but your bank won’t give you a company credit card? What if it’s simply not available soon enough? Nowadays there are many clever financial products on the market which can also be used directly and easily by start-ups. Prepaid credit cards with associated online accounts are quick to set up, but are also secure and flexible to use. The centralised company account provides an overview of all expenses at all times, as well as the requisite flexibility when expenses arise. You must never lose sight of your company’s financial status. This may seem obvious, but failure to manage finances has spelt the downfall of many a start-up.
- Determine the appropriate form of organisation for your company
Choosing the right legal form of organisation is an important decision for a new company, and one that start-ups need to consider very carefully. Although, once selected, the legal form is not set in stone, changing it later can involve some effort. The form of organisation defines the legal and taxation framework conditions for a company, so your choice must suit the needs of a FinTech start-up.
- Apply for licenses and register in good time
Start-ups should focus much of their attention on their product offering and customers, but even the best product and customer service can be at risk if you don’t have a handle on your day-to-day business operations. Start-ups must perform a great many administrative tasks, including registering with the tax office, listing the company in the commercial register, accounting, sales tax, and more. But to add to that already extensive list, FinTech’s are also subject to additional regulatory pressures. The second Payment Service Directive (PSD2) will, for example, come into force at the beginning of 2018 and can mean major changes for providers of alternative payment methods. Any financial service which can make automated payments at an end-user’s request while collecting and transferring data must obtain a PSD2 licence from the national financial regulatory authority.
(1) forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/#915f29c66792
(2) cbinsights.com/blog/startup-failure-reasons-top
(3) crosscard.com/solution/crosscard-expense
The infamous year 2016 is now behind us and we all have a fresh start moving into the new year - one which could perhaps be one of the most unpredictable since the market crash in 2008. Low confidence and an anxious approach to ambition could stunt the growth of startups, so here are my key resolutions that small enterprises should adopt if they want to thrive in 2017.
- Smarter marketing, not larger
It’s good business sense to always look after the pennies, but with unknown economic territories ahead of us, it’s important for start-ups to tighten up the side of the business where thousands could be wasted when hundreds could take you further = marketing. Social media and SEO will be the most cost-effective ways to drive brand awareness, so invest in consultants and training sessions to help you cover the basics that will ensure your business is heard in a world full of competitors. What’s most important for you to take note of in these workshops is the efficiency of micro-targeting – put spend purely into targeting where your audience digests content and news. Don’t look to reach large numbers, look to reach relevant numbers.
- Inspiration comes from the workplace
It might sound simple, it might sound unimportant - but neither is true. Your working environment plays a huge role on your energy, motivation and inspiration – three characteristics you’ll need in bundles to take a start-up off the ground. Walk into offices up and down the country and they can be flooded with unnecessary paper, overcrowded desks, folders upon folders and general mess. Take action and declutter your office by taking more of your work online – with the rise of cloud-based services such as Google Docs, sharing working documents has never been easier. What’s more, the cloud has been utilised across industries, and some services even allow you to take your accounting spreadsheets and numbers purely within the cloud. This takes me nicely onto…
- Re-evaluate your business tools
The beginning of the year is an opportune time to calculate all tools your business subscribes to, and analyse what’s working and what’s not. It could be that you’re paying for three different tools that can all be done by one, this will drive costs way down. For instance, Xero is a tool that allows you to take control of payroll, pay bills, send invoices, creating POs and more – it’s time to research what tools out there will optimise your business.
- 2017 will be the year of networking
Business owners will need to keep their finger on the pulse of trends that result from Article 50 being triggered. You can make predictions based on what you’ve read online and how your business has been performing, but to get a deeper understand and grasp on where trends will head, you will need to discuss the industry with your peers. Like Open Data, everyone will benefit from each other’s learnings and can adapt accordingly. SMBs are the backbone of the UK economy, and a united effort to thrive this year will help us prosper as we leave Europe.
- Prioritise your employees’ happiness
Hard workers are hard to come by. You’ll remember sitting in your office interviewing countless candidates who simply weren’t right for your company, so use that experience to treasure what you have now. Research what the larger organisations are doing and you’ll see a host of perk packages, health schemes and away days. While this is great and a real morale booster, employees really respond to one-on-one time with their boss. Simply showing your appreciation of their work and reassurance of their career path will give them the confidence to work for you, and the ambition to achieve for you.
- Protect yourself against security threats
Hackers and cyberattacks are becoming more sophisticated by the day, and the threat of a data breach is more likely than ever before. It’s vital that businesses of all sizes who use online and financial services ensure they have strong security practices. Using the most up to date virus protection and firewalls is a given, but extra layers of security such as multi-factor authentication (requiring a username and password as well as a piece of information that only the user knows) can help your accounts from being compromised by phishing and malware.
Authored by Gary Turner, UK Managing Director and co-founder of Xero.
(Source: Xero)
