The Future of Fintech Startups

There’s no definitive answer as to when financial technology was invented. Some sources like The New York Times claim it began in 1865 when Giovanni Caselli invented the pantelegraph, which allowed different bank branches to verify signatures from separate locations. Other sources indicate it was in 1950 with the invention of the credit card.

One thing is for sure, financial technology has expanded exponentially throughout the 21st century and it has no indication of slowing down.

What is financial technology?

The term financial technology (commonly known as fintech) was coined in 1993 and, according to Investopedia, describes new technology that seeks to improve and automate the delivery and use of financial services.

At first, fintech was utilized by companies, owners, and consumers to optimize and streamline their financial operations. Since the internet’s massive expansion in the 1980s and 90s, financial technology has exploded to address just about everything. The umbrella term covers anything from mobile banking to global transfers and managing your investments. That’s all without help from a third-party provider.

Banks have had a stronghold on the financial world since their conception, but more and more, fintech is causing a huge disruption in this status quo with its ease of access and user-friendly practices.

According to EY’s 2017 Fintech Adoption Index, one-third of consumers use at least two or more fintech services. Fintech has grown to become a daily part of our lives. So where is it going and how can small businesses keep up with the curve?

The biggest proponent

According to, the most successful fintech companies use blockchain and artificial intelligence to help predict and answer consumer needs.

What is blockchain?

At Veem, we believe that blockchain is “a peer-to-peer network of computers known as nodes that both participate and monitor asset transfers. Every transfer is recorded on each user’s computer (node), generating a platform of trust based on several identical copies of the ledger.”

As previously mentioned, blockchain eliminates the need for a third-party, which improves efficiency, security, and reliability when it comes to a consumer’s financial needs.

What is artificial intelligence?

Artificial intelligence, also known as AI, refers to technology that creates a simulated, human-like experience. Encyclopedia Britannica explains it as, “the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings.”

It is challenging as a business with a technology-centred focus to create a rapport with customers. AI is becoming an incorporated model in many online systems as it increases this personalisation between the consumer and the business.

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Who benefits from FinTech?

Research suggests that successful integration of fintech for startups depends on a customer-first approach. It is the “foundation for underlying fintech success.”

In this capacity, the ability for startups (which are often based first and foremost around technology) to combine service-forward businesses with financial technology fills a niche that has been difficult for financial institutions to participate in.

According to PWC, 81% of banking CEOs are concerned about the speed of technological change, more than any other industry sector. Technology has changed the way consumers do things and many of the legacy systems behind the financial services industry have failed to keep up.

Fintech carries a lot of benefits for businesses and consumers. It’s accessibility is a major plus for users. With the press of a few buttons with fintech technology, users can complete nearly all of their financial needs.

Fintech reduces major costs involved with finances, accounting tools, better exchange rates, and outsourcing. Time management is another benefit. As with financial technology, users no longer have to take time out to go to the bank, wait in line and can also make sending and receiving money almost instantaneous. Finally, the use of fintech allows users to focus on other aspects of business, like customer engagement, social media, and employee attainment.

Keeping up

In a report titled, Financial services technology 2020 and beyond: Embracing disruption, the PWC defines key integrations that businesses will need to stay ahead of the fintech curve:

  1. Update your IT operating model to get ready for the new normal
  2. Slash costs by simplifying legacy systems, taking SaaS beyond the cloud, and adopting robotics/AI
  3. Build the technology capabilities to get more intelligent about your customers’ needs
  4. Prepare your architecture to connect to anything, anywhere
  5. You can’t pay enough attention to cyber-security

Potential challenges with fintech

It would be a gross oversight to pretend that advancements in technology are not a huge factor changing the way businesses and consumers interact with each other. But despite its growth and success, the fintech industry is not free from challenges. According to, they will have to think about regulations, the global scale of traditional financial institutions, and user experience when using complicated technology.

As more and more fintech tools become accessible to consumers online, it becomes harder and harder to explain these processes in ways that consumers can understand and utilize.

Imagine you were going to build a chair. When you open the box, the instructions are in English and easy to follow. That is what simple banking applications are like. Now imagine opening that box and the instructions are in a foreign language like binary code. Now you have to learn binary just to be able to understand the instructions and assemble the chair. This is the challenge fintech presents: being able to make complicated finance systems easy to understand.

Another major challenge as outlined by the PWC report is cyber security. As more and more services become available online, so is the potential threat of hackers and malware having access to these financial tools. For businesses and consumers, the key thing to remember is that you can never pay too much attention to cyber security.


Veem is a great example of a startup marrying consumer needs with financial technology. Staying ahead of the game is important as fintech shows no signs of slowing down. By incorporating financial technology into your startup, you will be able to phase out third-party platforms, address consumer needs, and ensure they stay relevant.



* This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.