Staying ahead of trends is what successful investors do best. Yet, it can be hard to trace exactly where and when the next big investment hit is going to happen. Many, though, point to financial tech, also known as fintech, as a sector that is worth a second look.
Historically, fintech has been interesting, but not necessarily exciting. Now, that has changed as the fintech field has evolved rapidly. In early 2021, fintech funding topped the $91 billion mark worldwide. Those funds helped turn 42 startups into verifiable unicorns.
But why is this surge for fintech happening now? Blame society’s craving for instant gratification and real-time responses. Consumers have adjusted to being able to send and receive money quickly in their personal lives. However, they are always looking for faster, more instantaneous ways to safely shift cash around. Plus, they are transferring their “we want complete control over our finances” attitude to the workplace.
The result has been a widespread demand for breakthrough pioneering from fintech sector entrepreneurs and enterprises. Below are some of the most fascinating and potentially lucrative innovations that are driving a new era for fintech and the field’s investors.
Device-Agnostic and Speedy Digital Lending Applications
According to MeridianLink’s (NYSE:MLNK) Future of Digital Lending Report, the desire to move financial solutions to digital channels has reached tipping-scale proportions. The report shows that 99% of 300 financial institutions surveyed had moved their loan applications online. 54% of those institutions made their applications accessible through mobile devices.
Collectively, lending institutions have realized that people and businesses want near-immediate approval of loans. They are no longer willing to fill out papers and wait for days or weeks. Institutions that can put secure device-agnostic fintech software and systems in place can get — and stay — in the lead.
Enterprise-Supported Fintech Incubators
When you think of inventions, incubators, and brainstorming, you probably don’t think of fintech. That is because it has been mired in traditional thinking for so long. However, some fintech leaders are breaking the mold by investing in ventures that promote ingenuity and prompt fresh ways of approaching fintech.
Consider Fidelity National Information Services (NYSE:FIS) venture arm. It is a $150 million gamble toward coming up with systems and ideas that no one has seen yet in the world of finance. This isn’t as much of a risk as it might seem. To date, FIS’s willingness to think outside the box has netted it plenty of press for GoCart, a frictionless business-to-customer shopping card solution. Consequently, it is not a stretch for the company to roll the dice that its employees could come up with similar wins.
Fintech: Digital Currency for Everyday Life
Digital currency is having a moment and gaining more followers month after month. From Bitcoin (BTC-USD) to blockchain, the financial industry’s thought influencers are musing how to fold digital money into the mix.
Because it is such a new concept, most companies haven’t been able to streamline it into their workflows. Nevertheless, it is just a matter of time before digital currency becomes less of a fad and more of an everyday reality.
Already, around $3 trillion of cryptocurrency is in circulation globally as of November 2021. It is not something most investors want to make as their sole investment. Still, it is fast becoming a consideration for an addition in a robust, well-rounded portfolio.
Biometrics for Fintech
Is the answer to reducing the need to carry plastic cards in your palm? Biometrics believers are inclined to say yes. Many fintech entrepreneurs have tossed out the notion that financial security could lie in the uniqueness of the human body.
While biometrics is still in its infancy, its development can’t and shouldn’t be ignored. Like other fintech concepts that might seem hard to pull off at first blush, biometrics could be a valuable investment. According to Nasdaq, biometric leaders available for public trading include BIO-key International (NASDAQ:BKYI) and Intellicheck (NASDAQ:IDN). Others will no doubt start to bubble up to the surface as the biometric industry matures.
As always, do your homework before putting your funds into any investment. With that being said, don’t shy away from looking at fintech’s hottest and most exciting inventions and solutions. They could become the seeds of an investing dream.
On the date of publication, John Rampton did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
John Rampton, the founder and CEO of Due, is an entrepreneur and connector. While recovering from a serious construction accident when he was 23, he studied how to make money work for you, not against you. He has since written many articles about finance, entrepreneurship and productivity.