Fintech Investing

2018 was a polarized year for fintech, but industry experts are positive on the fintech outlook for 2019 and beyond.

While 2018 was a polarized year for fintech, industry experts are positive on the sector and say investors should look at companies “that have solutions that can scale.”

As noted in our 2018 fintech trends article, the year saw several small- and mid-cap companies expand their businesses to new regions. Multiple reports also indicate that fintech had its best year since 2014.

On that note, here the Investing News Network (INN) is taking a look at the fintech outlook for 2019 with insight from industry experts. Read on to learn more.

Fintech outlook 2019: Further expansion from companies

Several companies engaged in the fintech space have already hinted at their business expansion plans for 2019 and beyond.

In December, PayPal (NASDAQ:PYPL) announced the launch of its international money-transfer service Xoom in Canada ahead of an anticipated rollout to other markets in the world.

The company said it is targeting the US$24-billion annual remittance market in Canada and believes the service will benefit one in five Canadians.

In PayPal’s third-quarter earnings call, CEO Dan Schulman said that the company will work closely with its merchant partners. Schulman highlighted the company’s partnership with Chevron (NYSE:CVX), which it signed in October to improve payments at pumps.

“Together we plan to launch a new mobile payment app in early 2019 that will reduce the amount of time that a customer spends at the pump,” Schulman said during the call.

One Canadian company that expanded to multiple provinces in 2018 is Mogo Finance Technology (TSX:MOGO), and it is now set for a product expansion in 2019.

David Feller, CEO of Mogo, said in the company’s Q3 earnings call that it will be introducing new features such as a premium account in 2019.

“We just don’t have a specific timeline,” Feller said in the call. “It’s all about … picking and choosing the right features and products. MogoWealth, cash back — all of those are examples of things on our roadmap that are competing for resources and … prioritization.”

Meanwhile, Mobi724 Global Solutions (TSXV:MOS), another Canadian fintech company that expanded to multiple regions in 2018, is expecting to boost its revenues in 2019.

“In 2019, Mobi724 is expecting a significant ramp up in revenues in particular,” Marcel Vienneau, CEO of the company, told INN in an email statement. “We plan to hire many country managers to increase our presence and to be better positioned to capture our market share of the business. We will have more feet on the ground to showcase our value proposition.”

Vienneau said that the company is looking to close on a couple of “blue-sky opportunities,” including an artificial intelligence (AI) solution and a blockchain solution, both of which were initially teased in May.

“We will be launching our AI solutions in the first half of next year [and are] in testing at this moment,” he said. “We will also deliver blockchain-distributed architecture on key components of our solutions.”

Fintech outlook 2019: AI and remittance in focus

Research and Markets says in an August report that AI in the fintech market is set to be worth US$7.28 billion by 2023, up from US$1.27 billion in 2017. The firm notes that AI in the space will register a compound annual growth rate (CAGR) of 33.8 percent between 2018 and 2023.

According to the firm, the rise of AI will be caused by an increase in third-party applications featuring integrated in-app transactions. Research and Markets highlights Facebook’s (NASDAQ:FB) communication platform WhatsApp as a third-party application that features in-app transactions.

“This will raise the bar for cyber attacks and possibilities for fraud owing to which the incorporation of artificial intelligence is expected to gain traction and propel the market growth over the forecast period,” the firm notes in the report.

Research and Markets predicts that chatbots (automated chat boxes) will grow further as more consumers switch to the fintech space. The firm says the industry will have a “tough time” providing human help to consumers, leading to the rise of these chatbots.

It also says that the Asia-Pacific region will be the fastest-growing area in the fintech space due to its large population and the fact that countries there have the fastest-growing economies in the world.

Meanwhile, QYResearch predicts that the global remittance market will reach US$8.59 billion in 2025, up from US$1.53 billion in 2018. It will grow at a CAGR of 23.3 percent during the forecast period.

“The cost savings from digital remittances could be a meaningful boost to global GDP and have a noteworthy impact on poverty,” the firm notes in its report. “In order for all of these positive developments to be realized, and enabling environment for digital remittances must be created.”

Research and Markets says in a separate report that the remittance market plays a vital role in people’s economic growth and livelihood.

“From a macroeconomic perspective, remittances can boost aggregate demand and thereby spurring the GDP as well as economic growth,” states the report.

Fintech outlook 2019: Investor takeaway

With fintech companies looking to either expand their presence or their product portfolios in 2019, and with players adopting new technologies, the sector will certainly evolve in the next 12 months.

Vienneau said that investors who are new to the sector should look at companies that have solutions that have been vetted globally by top brands.

“Look for companies that have solutions that can scale and [have] a business model that is global,” he said.

Don’t forget to follow us@INN_Technology or real time updates!

Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


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