fintech, fintech development

Four Areas of FinTech Innovation That Have the Most Buzz in 2017

Andrew Zola
Andrew Zola on Linkedin

The digital age has fundamentally changed how we work, connect, communicate, and conduct business. The same can be said for industries like finance and insurance that have been historically resistant to change.

The buzz around the FinTech phenomenon has got a lot of skeptics saying that it’s going to go down the same doomed road as the dotcom boom of the late 1990s. But while great ideas might be attracting investment in a similar manner, the similarities between both eras stop there.

While people like the veteran financial-services investor, J. Christopher Flowers, expect most FinTech startups to crash and burn, we at Digi117 beg to differ.


In the API economy era, a lot of banks around the world have recognized real value in FinTech. In fact, we are now seeing a huge difference in how traditional banks are going to market.

In a sense, they are attempting to create new enhanced customer experiences by embracing open banking and the power of the connected world.

Unlike dotcom, FinTech is a business-driven model that can be a long-term process. Venture capitalists are aware of this and place a heavy emphasis on business models with strong fundamentals.

FinTech will also continue to grow because of the diverse nature of their offering:

  • Digital banking
  • Digital currencies
  • Equity crowdfunding
  • Insurance
  • P2P lending
  • Personal finance

What’s more, the industry is driven by innovation and this is exactly what’s creating all the buzz within this segment.

So what are the innovations that have been making the most noise within the FinTech space this year? Let’s take a look.

Initial Coin Offering

We have to start with crypto currencies as that’s what’s been making the most noise within the industry. Sure there have been hacks and forks along the way, but these digital currencies are here to stay.

In recent months, founders of new coins have started raising funds for it by engaging in what’s called an Initial Coin Offering (ICO).

Just like the tech IPOs in the late 1990s, some of these offerings are hugely successful raising millions of dollars (within minutes, days, or weeks), while others fall by the way side.

"Essentially, what’s happening is that the inventors of a new currency go out to the public and raise money from the crowd by pre-selling a new cryptocurrency, usually at a discount,Zack Miller, the host of a leading FinTech podcast Tearsheet.

Money Transfers and Payments

Money transfers and payments are growing rapidly in popularity as it seamlessly joins online payment gateways, mobile wallets, and money transfer services together. In fact, this niche accounts for up to one-third of all FinTech investments.

Open Banking

Probably the biggest innovation in finance and banking is open banking where access is enabled to read and write banks’ APIs. This has a huge potential to innovate and create new businesses as we will have access to data that’s never been seen before.

This approach will also enable customers to have multiple relationships with a variety of financial entities. As a result, this will be a significant departure from having a relationship with just one or two banks.

"With open banking, anyone can sit between you and your bank." Edoardo Moreni, co-founder of Emma.

This means that anyone can be a financial advocate that takes care of anything financially related like debts, investments, and insurance.

As a result, customer experiences within the financial sector can be heavily customized to suit them, not a financial institution.

Artificial Intelligence (AI) and Machine Learning (ML)

Over 50% of financial services companies are working on chatbots and customer service augmentation to stay relevant in the future.

In India, HDFC Bank has already rolled out a virtual assistant called Eva that’s driven by AI and ML to provide customer service. This is a game changer and one that can evolve to have a significant impact on the bottom line.

As FinTech continues to grow, it’s impossible to see how these innovations can simply die out. Rather, they will probably grow, overlap some traditional financial services, and maybe even replace a few.