Ringing in the holidays, means nearing the end of year, and at Credorax we decided to take a moment to reflect on the major transformation the fintech industry experienced in 2016. While Blockchain and IoT obviously made every Top 10 Trend List, let’s be honest, the biggest trend – or more bluntly put, game-changer – was the end of the so-called fintech unicorns.

From unexpected regulation restraints to a shockingly overcrowded and saturated market, analysts continue to ponder and debate exactly what finally caused the shakedown this past year. One undisputed conclusion across the industry is that the ‘collective surviving fintech companies’ have something in common – namely, they speak to the pragmatic demands of today’s consumers and businesses, and therefore ensure real ROI for their internal and external stakeholders, including employees, investors and customers.

Consumer Demand: “Easing Financial Burdens”

Today’s consumer expects practical fintech solutions that fill a void by providing services not being offered by traditional banks or financial institutions. The need for lower banking fees, personal financial management tools and access to flexible lending solutions remains among their top priorities on a global scale. PwC cites the World Bank Group’s estimation of 2 billion adults – 42 percent of the population – are outside the financial system and goes on to size the global unmet deposit demand of the un(der)banked at $360 billion.

Particularly in the U.S., it is no secret that this remains a key issue among consumers and was recently highlighted in a no-holds-barred national survey, conducted by Blumberg Capital in association with Regina Corso Research.

According to the survey, at a high level, most Americans want access to flexible borrowing options, think that current traditional financial institutions charge too much interest on debt and believe that the “underbanked” need access to better financial service options.  >

Specific findings reflecting the collective sentiment include:

  • 80% of Americans agree that financial institutions need to focus more on helping the average consumer (vs. the 1% wealthy);
  • 79% of Americans stated that they want access to flexible borrowing options that minimize their interest payments;
  • 76% of Americans believe that financially underserved people such as those with low FICO scores or bad employment histories need access to options for loans/credits outside of traditional banks.

An overwhelming number of survey participants felt that they could find solutions for these ‘voids’ through fintech products and services. The survey concluded that the majority of Americans believe traditional financial institutions are failing Americans, with nearly 70% looking to fintech to solve their problems.

SMB & Large Enterprise Business Needs: “Goodbye Disruptors, Hello Joint Partnerships”

The unicorn shakeout also paved the way for the demise of the ‘disruptor’ crusade by several fintech companies. A clear outcome that came to light this past year is that fintech and traditionalists have both come to terms with the fact that they need to work in a cohesive environment. From entrepreneurs to SMBs to large enterprises, businesses today are demanding integrated, best-of-breed solutions. For example, many enterprises want joint modularized, licensed SaaS offerings from both parties vs. one or the other – which HP Business Canada’s article confirms.

Consumers & Businesses Alike: “Show Me the Money”

As we enter 2017, one common expectation from both consumers and businesses is sticking with fintech solutions that can go beyond simply ‘filling a void’ and bottom line, bring them additional cash flow.

Consumers will continue to select fintech products that can improve their individual or family financial situations, such as gaining access to alternative credit lines or micro investments or utilizing one of the numerous personal financial management apps on the market today.

On the flip side, businesses can leverage fintech innovation to broaden their revenue streams. For example, there are fintech companies – especially digital processors and merchant acquiring banks – that play a key role in helping both entrepreneurs and enterprises reap the benefits of global e-commerce markets.

U.S. entrepreneurs and large enterprises can both go beyond domestic borders and grow their revenue streams by expand their customer reach into new global e-commerce markets via fintech innovation. For example, recognizing the importance of partnerships, Credorax teamed up with Vantiv in 2016 to support both U.S. SMBs and large enterprises, to help them expand their footprint seamlessly into Europe. To find out the benefits of bringing your business overseas, take a look at a recent presentation given by Credorax and Vantiv or contact grow@credorax.com.

Happy holidays to you and your loved ones and stay tuned for our next take on what the fintech industry will mean for consumers and businesses in the year to come!