How will FinTech innovation shape 2015?

FIAarticle22014 was the biggest year in FinTech by far, with billions invested in innovative startups that challenged the status quo in the financial sector. But how will 2015 see FinTech players crack the mainstream?

The first month of 2015 has already gone well for the likes of Transferwise, who landed a not-too-shabby $58 million to expand their peer-to-peer transfer platform from US VC group Andreessen Horowitz Ventures. The investment comes as part of a turnaround in the European tech sector, which has often missed out on funding from Silicon Valley investors who preferred startups that were closer to home.

International tuition payments startup peerTransfer also picked up $22 million, which will help the platform add more universities in the UK, Canada and Australia, and also South East Asia, where the company is yet to have a presence. More and more students will be able to pay tuition fees in their own currency, saving them from the pitfalls of the inefficient and highly expensive cross-border transfer space.

The money transfer market is likely to expand even more in 2015, with more companies challenging banks and existing players to provide a more transparent and cheaper service to those sending money abroad, especially for remittance purposes.

Mobile money has had a big part to play in the remittance market. MPesa and many of its competitors already act as a collection option for several remittance providers, and other companies, such as South Africa’s newly launched Mama Money, are tackling some of the most expensive remittance corridors in the world. Mobile money gives many in emerging markets better control of their finances and access to financial products that they would have otherwise been unable to reach.

Peer-to-peer lenders are doing the same job for small businesses and individuals unable to access funding from traditional lenders. 2014 ended with a $1 billion IPO for Lending Club and a boost for other P2P lenders as many started to partner with banks to expand their consumer base. The next year is likely to see more agreements of this kind as banks realise the worth of peer-to-peer lending.

The more innovation we see in FinTech, the more people have control of their money. The last month has already seen Capital One acquire money management app Level One, and Money Dashboard raise $2.5 million to expand its Edinburgh-based personal finance platform. While early adopters drove financial innovation in 2014, over the next year mainstream adoption will come from the realisation that better technology in this area means a higher level of financial control for everyone.

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