Five Brilliant Fintech Business Ideas for 2021.
In recent years technology has been disrupting the financial industry. The FinTech, or financial technology industry, has grown to be worth hundreds of billions of dollars and grows at 20-25% year over year. Consumers will continue moving away from traditional banks and access their savings, loans, and investments online and via mobile apps.
The Covid-19 pandemic has further amplified the growth of fintech. People no longer have a reason to visit a physical location to manage their finances.
This article will share five different fintech business ideas that have great potential to start in 2021. Financial startups can launch faster, cheaper, and create new products faster than traditional large financial institutions.
Crowdfunding and peer-to-peer lending apps
If you’re brainstorming fintech ideas, consider building a startup that can help other startups. Startups need capital to get started and gain traction. Sometimes the capital can be raised by a single investor, but those can be difficult to find.
Crowdfunding apps help startups and entrepreneurs raise money for their ideas without needing a single investor or VC. Crowdfunding platforms can also help build a following and provide proof-of-concept. By posting a startup idea on a crowdfunding platform, people can quickly see if there’s a real interest before getting in too deep.
Kickstarter has the largest user base in the app-based crowdfunding space, and it can be a great example of a top-notch crowdfunding app. Innovation in the financial industry is more complicated than in other industries. Many existing financial institutions have been around for more than 100 years and have a large customer base and financial footprint. It’s difficult for a new startup to compete with them, find new customers, and navigate the highly regulated industry.
Other crowdfunding apps have found success in pursuing a specific niche. For example, Patreon has helped over 200,000 artists crowdfund their content with a monthly subscription. And Causes is a popular crowdfunding platform focused on social, political, and cultural issues.
Historically, only 1 out of 3 crowdfunding campaigns finds success. That means for a crowdfunding app to succeed, it will need to attract quality ideas and people willing to support the ideas.
Cryptocurrency apps
Since it was developed in 2009, Bitcoin and other cryptocurrency has gained massive popularity. You can use blockchain to build an app for cryptocurrency trading. Blockchain can help you build a secure system that’s perfect for keeping users’ financial information safe.
Cryptocurrencies are digital assets stored in a distributed ledger. Using a distributed ledger rather than a centralized ledger reduces possible cyberattacks and financial fraud.
An example of a popular crypto app is Coinbase. Coinbase is a popular platform for trading cryptocurrencies like Bitcoin, Ethereum, and Litecoin, and it also has a built-in wallet for storing digital money. Millions of people use apps to buy and trade cryptocurrencies, but the technology is still new and has a low market penetration.
The level of security and information integrity of blockchain apps is a significant advantage.
B2B Payments and Invoicing
Peer-to-peer payment apps like Venmo and CashApp have build a vast customer base in the past five years. Instead of getting cash from an ATM or asking to split a check five ways, friends and family can instantly send money back and forth.
Goldman Sachs reported that paper checks are still used to pay the majority of B2B invoices. An estimated 80% of small businesses are sending manual invoices and paid by checks in the mail. In the global economy, manual invoicing is an outdated and inefficient process that wastes time and effort.
Currently, there isn’t a B2B payment processor that controls the market. PayPal, Bill.com, and Quickbooks all offer invoicing, but there’s still much room for improvement. An all-in-one system that allows business owners to send invoices and quickly receive payments can benefit thousands of businesses.
FinTech Online Education
In the past year, millions of students transitioned to online learning. Instead of attending classes and in-person seminars, people are watching videos and completing courses online. FinTech is still a relatively new idea with plenty of room to grow and expand. Most people have limited knowledge about the power of fintech and how it can improve their life.
Online course platforms like Teachable and Skillshare teach people a variety of skills. Neither of those platforms is dedicated to a specific topic, so teachers can create a course on whatever they choose. There’s an opportunity to scale down the online teaching platforms and focus on a particular topic, such as fintech.
Fintech is a topic broad enough to attract a variety of teachers, students, and courses and small enough to help build a like-minded community. An online teaching platform would provide learners with a space to learn about fintech and new developments and allow experts to create and teach courses.
Tax preparation
When it comes to taxes, people want the process to be as easy as possible. TurboTax, which was created by Intuit, is the market-leading software that helps Americans file their taxes quickly and easily. Every year, roughly 80 million Americans seek professional help in preparing and filing their taxes.
Taxes can be complicated, and a significant cause of stress for small business owners and entrepreneurs. Advances in technology can help taxpayers pay their taxes on time and ensure they’re paying the right amount.
It’s the business owner’s responsibility to figure out how much they need to pay the state and federal government, keep track of their different streams of income, and track their business expenses. A tax preparation app or software can help businesses track their income, expenses and automatically calculate taxes owed throughout the year.
5 Keys for starting a successful fintech business
If you’re considering starting a new fintech business, there are some keys to success. If one of the ideas in this article has inspired you, make sure to do further research before you fully commit.
Find one way to differentiate your business
Focus on creating a great end-to-end user experience
Spend time creating a pitch deck that tells your story
Stay up to date and follow the regulations—don’t try to cut corners
Don’t try to compete with big corporations. Focus on your customers instead of your competition