This post covers USA and Europe with an analysis of their Fintech companies.
USA
1. The USA is the global center and the most aggressive and successful player in banking innovations.
2. Large USA banks are somewhat behind some of their international competitors, but in 2014 they have realized their situation. 2015 is expected to become the year when they really ‘start their engines’.
3. The USA has two geographic focus‐points of FinTech innovations: New‐York and the Silicon Valley.
4. The USA is the global leader in providing funding for FinTech startups and is increasingly becoming an acquirer of successful FinTech initiatives from around the world.
5. The USA has a very special attribute in the global FinTech Revolution. It is the only player that can bring global non‐financial companies to the forefront of financial innovations. A great example is ApplePay by Apple, and Google is also known for some upcoming major innovations in the financial arena. PayPal – currently owned by E‐Bay – is also expected to bring new competitive power to the table soon, probably after a spinoff.
6. Despite the USA being the frontrunner, there is an exciting ‘old school’ banking phenomena also present: 2/3 of all the checks in the world are written in the US, a interbank wire transfer normally takes three business days.
USA FINTECH COMPANY (MOVAN)
1. A smart‐phone app tracking the customer’s money. This app has six remarkable features:
(i) A Spending Meter: A beautiful and smart visualization of personal financial spending‐ capacity.
(ii) Instant Receipt: An instant dataflow after each dollar spent giving the customer feedback and an info‐dashboard on what happened.
(iii) Automatic Categorization: Moven categorizes spending items automatically.
(iv) Smart Transfer with social‐media integration: Moven app provides the capability to transfer money to friends through phone number, email address or Facebook profile.
(v) Suspend and Unsuspend: Suspend and unsuspend the account in case of card‐fraud, lost or stolen card.
(vi) It can be linked up with non‐Moven cards and accounts on top of the normal Moven card and account.
2. Tap to pay with MasterCard’s PayPass technology. The client can place the sticker on the back of the smart phone and just wave it in front of an NFC reader to complete a payment that is at the same time administered by the Moven smart app. Account opening directly from the smart‐phone.
3. Moven is strict on being “branchless”, part of its philosophy and, therefore, not part of its cost‐structure. Moven has a simple, transparent fee‐structure: no monthly fees, no ATM fees. It can maintain this fee‐structure since it has a simple cost‐structure.
4. Among the strengths of Movenis is they emphasize the real‐time data input‐output and analysis when consumers are spending their money. Instant analysis and instant feedback mechanism is almost addictive. It carries the hallmark of disruptive technologies: if we imagine that it already is the industry standard and everyone is using it, would large groups of people switch from this to the old situation (not having instant analytics of spending)? If the answer is that large group of people would not want to move back that means it is probably going to become wide‐spread.
EUROPE
1. European FinTech efforts can be divided into two groups: (1) London and (2) the rest of Europe.
2. London is competing with the USA as the global center of financial innovations. So far, the USA is winning (through being two‐legged: NYC and the Valley), nevertheless, London in itself is the hottest spot in global FinTech. There is one more aspect of London that challenges the USA and that is the dynamism of FinTech developments: as of early 2015, the growth‐rate of FinTech is higher in the UK than in the USA. London is the second (only after the USA) in terms of providing funding (venture capital) for its FinTech community.
3. The rest of Europe is largely behind. Frankfurt, Paris, Madrid and Amsterdam show some activities but not much. Eastern‐Europe is – interestingly – highly inactive except for one country: Estonia. Estonia is highly innovative and surprisingly well integrated into 21st century financial trends.
4. There is one area of FinTech that Europe is ahead of the entire world on: forex. The online foreign exchange transfer services are largely concentrated in Europe, which may be the result of Europe being a fragmented continent with a number of national currencies circulating despite of German efforts to spread the Euro across the continent (which seems to be especially problematic at times when probable Greek exit is likely to start a domino effect of others leaving the Euro‐zone.)
EUROPE FINTECH COMPANY ( TRANSFERWISE)
1. TransferWise is the leading Online FX Transfer Service. It was started in January 2011 out of frustration by Taavet Hinrikus (a key person at Skype) and Kristo Kaarmann. It has competitors globally, but its funding, branding and communication advantages save it from commoditization.
2. TransferWise is a very important company in the FinTech landscape. It is the undoubted flagship of the global FinTech revolution – the stereotype of the successful FinTech disruptor in the eyes of thousands of experts, hundreds of thousands of bankers and millions of clients.
3. TransferWise has attracted cca USD 100 million venture capital in several rounds of funding. It is the best capitalized Online FX Transfer Service and one of the best capitalized FinTech companies. Richard Branson has been an early investor and a mentor as well as a brand‐face of the company. Branson is the number one icon is disrupting hard‐to‐enter industries through dedicated arms of his Virgin holding. His presence, approval and support of the company have been crucial and highly beneficial. Branson’s authoritative presence as the global icon of disruption, combined with Hinrikus’ success as a key creator of Skype, is a double brand‐support structure hard to parallel.
4. TransferWise is beating many of its competitors on compliance and procedural advantages. The company is trying to keep its administrative processes as simple as possible. Some experts think that there is a certain amount of calculated risk‐taking behind this.
5. Banking Reports has been researching the global Online FX Transfer Service landscape thoroughly and has found the processes of TransferWise the most customer‐friendly in the entire industry.
6. There are a number of extra things that TransferWise offers, but only a few competitors can match up: Website‐embedded pay‐links, Call‐Center and a very smart and aggressive referral program and welcome‐gifts. Many competitors are better though on loyalty enhancement.
7. TransferWise is a genius at utilizing a vast array of marketing tools. They use testimonials in an exemplary way and are very smart in finding ways to communicate their size: they try to show potential clients that they are the largest because they are the best, and since they are large, they are trustworthy. Size‐given advantages are communicated so perfectly that TransferWise is becoming the de facto standard of transferring money cross‐border.
(Soruce: MarketResearch)
