#3. P2P Lending
Decades ago, the P2P lending space was in its nascency. Only one or two companies like Prosper and Lending Club existed. Now, the idea has taken hold. In fact, the P2P lending market revenue is estimated to reach USD 804.2 billion by 2030.
As consumers and businesses look for alternative funding sources to banks, the best option is to work with these P2P alternatives.
However, these microloans require a lot of machine learning, intelligent algorithms, and AI technology to underwrite the loans.
Velvetech leverages the latest P2P technologies to provide comprehensive lending software platforms that facilitate efficient and secure transactions, empowering borrowers and lenders alike.
#4. Crowdfunding
Crowdfunding is the cousin to P2P lending. This fintech vertical is still on the rise. According to Research and Markets, this market is projected to reach $44.75 billion by 2030.
There are three main types of crowdfunding it is worth considering.
- The first is for people who invest in a new product or idea because they want the product. Often, sites like Kickstarter show you the latest gizmos and gadgets when they first launch.
- Second, charities use crowdfunding to support their cause.
- Third, some crowdfunding sites give investors a small piece of equity in a new startup looking to raise funds.
With multiple people involved in every transaction, the technology needs to track all parties involved. Crowdfunding sites use machine learning databases and payment integration technologies to achieve this.
#5. Investment
It almost seems pre-historic now, but traditionally if you wanted to trade a stock, only a broker could order a stock certificate. The physical stock certificate exchanged hands on the trading floor where the broker bought your stock.
How the world has changed! Today, investors have the power to take control of their investments with the aid of sophisticated investment management software. Now, you can do quick and easy trades on your mobile device without any human assistance in less than a minute. The right technology can help you make the right investments.
Mobile technology is only part of the equation. For instance, today investors actively use AI and machine learning technologies to help them make profitable investments.
See how Velvetech worked on an Intelligent Trading Platform
#6. Financial Management Platforms
Over the past few years, change struck the financial management industry.
First, many product commissions were eliminated. Previous prime earning scenarios went away.
Second, the government started enforcing a harsher version of the Investment Company Act of 1940 that requires Registered Investment Advisors (RIA) to put their client’s interests first irrespective of all other factors.
Third, the 1% fee most advisors now charge might become a thing of the past. For clients with more substantial amounts, it is not worth it to pay someone $10,000 on a $1 Million account every year for advice.
That is why fintech stepped in to fill the gap. Sites like Betterment use a series of algorithms to determine the best course of action for your investments at a fraction of the fees.
Just like AI and machine learning help investors, they help financial management platforms identify and verify top investments based on your criteria and goals.
#7. Insurtech
The insurance technology subsector within the fintech is also witnessing rapid growth.
Insurtech combines mobile solutions, Big Data, IoT, AI software tools, and a mix of algorithms to help insurance companies manage risks, increase sales, and improve their returns.
Some Insurtech companies like BIMA provide health insurance services to consumers through their mobile devices. The data collected from users’ devices help them track information, and then the data gets used to create innovative products based on client needs.
See how Velvetech delivered Innovative Solutions to a Small-Business Insurance Company
#8. RegTech
Regulations and compliance are essential sectors of fintech. Regulatory Technology (RegTech) aims to help financial institutions comply with legal requirements.
RegTech automates compliance processes by leveraging technologies like ML and data analytics. This, in its turn, leads to risk management automation, real-time compliance reporting, and more.
Some common and well-known regulatory compliances that are worth considering when developing FinTech software are Know Your Customers (KYC) and Anti-Money Laundering (AML). They help verify customers’ identities and detect and prevent money laundering activities.
RegTech also employs strong data security and privacy protections to safeguard sensitive information and ensure compliance with data protection standards such as the General Data Protection Regulation (GDPR).
