Fintech startups grabbed the most wins this year, by miles, and here's why.
Fintech, or Financial technology, is changing the way we move money as we know it, forever. Now more than ever, financial institutions are prioritising digital innovation in making.
Fintech is many things, from loans, to fundraising, asset management, money transfer, and in summary, how we move or keep our money. When we change the way money moves, it has the power to change the way entire businesses operate, considering that the fundamental part of every business is to get money moving, quickly.
It is the bedrock of digital businesses. It is also the bedrock of the digital lifestyle. So for example, why do I need to worry about my saving discipline, when I can get Piggybank to help me save better, conveniently?
The Financial system of older legacy institutions are traditionally sluggish, enjoying privileges that come with monopolistic methods. The size of these companies also mean innovation is slow.
Now, fintech startups are taking a shot at these financial institutions, and bringing these services closer to the most important factor; the consumer.
In more ways than one, these startups are making the movement of money better, faster, and painless.
Paylater, for example, will give you loans of up to 1 million naira, without a collateral (Terms and conditions apply, though), when some financial institutions still ask for an arm when issuing a loan.
And Piggybank is kinging the savings space. And they invested all of their resources in making it super convenient to put money aside, whether small or large, whether daily or monthly. This flexibilility is what helps them thrive.
And remember when investments seemed like a elite thing to do? Farmcrowdy wants to change that. They’re basically making it possible to invest little money in farmers, while you get returns on your investment after a set period, mostly short term.
Minus Paylater, none of these companies existed three years ago. Something is happening.
Another very interesting company is ALAT, which is pretty much an app-only bank.
The thing about disruption is that it gets everyone back on their feet. In the end, most of these startups will have even bigger wins when they work with already established financial institutions, and it’s already happening.
Piggybank for example, secures all its funds with UBA. Flutterwave already helps banks like Access Bank power payments. ALAT, as we know, is Wema Bank’s baby.
Banks can focus on making more profits: While these interesting startups can focus on making technology to make banks increase customer satisfaction, and make more money. Everyone’s happy.
The love can be mutual: One thing banks have, more than any startup, is data. Data on consumer behaviour and trends. A startup, armed with more data for example, can use the invaluable insights to help build better, more interesting products. A fine blend of the zeal of the young, and the experience of the old.
Increase reach: Because in the end, growth is vital.
We expect that much older financial institutions will adopt more innovation, as more entries will find their way into the Nigerian ecosystem. There are speculations that Opera will be entering the Nigerian fintech space.
More business too, will be adopting these innovations to make payments easier and faster.
In the end, competition makes the technology better, and eventually, the consumer wins.