Financial technology (FinTech) refers to technologies that improve access, use, and efficiency of financial products and services and the industry built around such technologies. It is where technology meets finance to automate processes, allowing users to gain insights and access to markets and to make financial transactions easier.
FinTech in 2023
According to Forbes, the global FinTech industry is worth $245 billion and is predicted to grow at 16.8% annually. It has expanded from the early days of Internet banking to include products and services on financial education, transactions, loans, taxes, etc., aimed at helping consumers make better financial decisions and manage their activities.
FinTech is also impacting those involved in trading forex at all levels. Forex companies design trading platforms that allow traders to explore global markets, trade from the comfort of their mobile devices, analyze markets using advanced tools, and receive payment from anywhere in the world. The amazing possibilities in applying technology to finance are endless; the dynamic demand means new financial solutions will always be across the niches.
Are you looking to start a FinTech firm? This article explores the top 10 promising niches you can explore to launch a business.
Blockchain and Cryptocurrency
Blockchain and cryptocurrencies have become popular in the last ten years, creating a new financial market that appeals to various demographics. Developing blockchain-based products and services through features such as decentralized finance (DeFi) has opened new opportunities for investments and businesses. You can explore the blockchain industry to create crypto-powered financial products such as peer-to-peer trading systems, online marketplaces, and cross-border payment systems.
Digital Crowdfunding
Traditional crowdfunding has proven successful in many cases, helping businesses to raise funds for operations. Today, digital crowdfunding improves aspects of the conventional system, making it easy for crowdfunders to pool funds from anywhere in the world. Digital crowdfunding plugs gaps such as security, integrity, and ease of payment. One good example is the GoFundMe platform.
There are several opportunities to build specific crowdfunding products for digital markets. This is more promising than all-purpose platforms. For example, a crypto-powered crowdfunding platform that rewards participants with redeemable tokens.
Trading and Investment Platforms
Financial markets increasingly rely on FinTech solutions for speed, efficiency, and stability. With more traders and investors today, the various broker and trading platforms have developed personalized products and services that help users enjoy a rich experience. You can explore this niche by identifying gaps or areas you can improve on to help investors make better decisions and earn returns on their portfolios.
Consider developing expert (Robo) advisors that automate the trading process and help investors trade at a low expense to them. You can also consider products and solutions to train investors on trading and provide a safe way to practice trading.
Payment Processing Services
The financial sector and global economy are only as successful as the efficiency of their payment systems. Payment processing is the most known application of FinTech, thanks to platforms competing with traditional payment processors in the trillion-dollar industry. The chief issues with payment processing services are speed, cost, and security. Developing a solution that addresses all or some of these issues is a great idea for establishing a business.
You can also consider selling your payment processing platform to bigger companies using the idea-build-sell model. This is a great way to make money from the industry as a serial entrepreneur or investor.
Security
All sectors and industries are continuously targeted by fraudsters, hackers, cyber-attacks, and financial misappropriation. FinTech solutions are developed to detect and prevent financial fraud, protect consumers, and stabilize economic systems. You can explore this niche to build more effective solutions that improve the security and stability of payment processors, investment and trading platforms, digital banking products, etc.
The best thing about this is that you can offer this service to customers and businesses, which increases your potential customer reach.
Insurance (InsurTech)
The traditional insurance landscape is the latest to see FinTech disruption. Integrating technology into traditional insurance benefits includes improved customer experience, cost savings, reduced fraud, and enhanced transparency. Today, InsurTech solutions automate the insurance process between banks, insurance companies, regulatory bodies, and their clients (individuals and businesses).
The insurance industry is worth $6 trillion and is predicted to hit $8.4 trillion by 2026. There are many gaps to explore in insurance to build a financial technology business. Technologies such as AI and ML can help with predictive analysis and automation and improve security for any product you build.
Digital Banking
Digital banking brings traditional banking services to people in the comfort of their mobile devices, so they spend less time, energy, and costs to get banking services. Digital banking also increases the reach of financial institutions to areas that traditional banks do not cover. Exploring this niche for a FinTech business is a great idea. There’s always a gap; more customers need banking services each year.
Asset Management
With more people looking for income sources, there are more opportunities for experienced traders to build successful asset management businesses today. If you are a professional trader or can put together a team of expert traders, you can build an asset management business to manage client assets and get paid an agreed percentage. You can even turn your trading strategies into automated trading programs (robots) and sell them to investors who want them. Research Precedence predicts the asset management industry will reach $7,553.96 billion by 2032.
Conclusion
FinTech has impacted many areas of finance and other sectors and is not slowing. Whether you are a new or seasoned entrepreneur looking to enter the FinTech market, these niches are some of the most promising based on market value and projected longevity. The key to success is finding your FinTech business edge and leveraging it to get more customers and improve your products and services for optimum consumer satisfaction.