The future holds optimism for fintech companies, not only for the next quarter but for many more quarters over the next few years.
Fintech companies have seen a steep rise in recent years.
A rise in digitalization and computational technologies like blockchain and artificial intelligence has made financial procedures quite convenient and efficient, while leading to stock prices shooting up in the present day economic scenario.
Many have talked about the importance and concerns of such fintech technologies. However, all agree on the fact that it is the age of fintech investing.
KPMG’s 4th quarter of 2017 fintech companies report states that a staggering US$8.7 billion was invested globally during the quarter, topped by an investment of more than US$31 billion over the span of the entire year. This boom can singularly be attributed to the strategy and performance of the key players that continue to drive up investments and business in the fintech sector, quarter by quarter.
With 2017 being a phenomenal year for fintech, and with 2018 hitting a new quarterly record of global fintech funding of US$5.4 billion, the remainder of the year certainly looks promising.
Let us have a look at five fintech companies to watch out for in the next quarter.
1. Fiserv (NASDAQ:FISV)
The company wins the game through the power of technology. It helps financial institutions make the transition from physical and manual processing to completely digital. Also pioneering in accelerating startups in the fintech domain all over the world, it has made its stock value rise in amazing proportions. It has not experienced a negative annual return since 2008, consistently striving to maintain its standards by focusing on innovation.
In fact, Fiserv’s senior vice president, Matt Wilcox, issued a statement in February 2016 which was published on the company’s blog, The Point, where he reiterated the secret to Fiserv’s success. “While operational demands may limit the resources financial institutions can dedicate to innovation initiatives, for Fiserv, innovation has always been a focus.”
2. PayPal (NASDAQ:PYPL)
The most profitable and applicative use of fintech is the sharing of money or the payments market. In this era of digitalization, ordering food to booking tickets – everything is done on a mobile phone. And that is exactly how humans of today handle even their financial matters. This makes the market of PayPal or for that matter, any online payments or money sharing application a win-win enterprise when it comes to hitting target groups and being accepted in the market.
The personalized one-to-one payment industry is expected to leap by 10 times by 2022, up from US$35 billion to a staggering US$350 billion. When it comes to digital payments, the market increase is projected to grow from US$3 trillion to US$8 trillion by 2020. PayPal is the frontrunner in both fields and, going by its success, it is only headed for greater heights in the near future.
3. Guidewire (NYSE:GWRE)
Guidewire’s name is general to most of the insurance firms around the world. The company primarily manufactures products for more than 300 normal and casualty firms. Guidewire’s core software products — Guidewire InsuranceSuite and Guidewire InsuranceNow — are what lie in the heart of the P&C processes of all the major insurance companies today. The company is making a profitable and welcomed step of transforming its product from perpetual software product to a subscription on a monthly basis system that can be accessed from its cloud.
“This year our new cloud-based solutions received strong positive feedback, and we noted an increased willingness to consider cloud-based core systems as well,” Marcus Ryu, CEO of Guidewire said. “As a result, today we expect our mix of sales to feature more subscriptions and fewer perpetual and term sales than our initial expectations for fiscal 2018.”
4. Square (NYSE:SQ)
Square provides the tools for small businesses to bring digital payments to their doorstep. Interestingly, the way Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) changed the way we interact with the entire world, and the way Google changed the way we collect information, Square is transforming the hand to hand payments in small businesses. It is on its way to meeting its break-even point and the stocks are high and they are only going to go up higher. Its optimistic future provides a less risky investment option for interested parties.
5. Intuit (NASDAQ:INTU)
Intuit recently announced that it was starting up QuickBooks Capital, a grant providing platform for businesses that use its book platform up to a maximum of US$35,000.
Intuit, unlike Square, uses data science–particularly data analytics and artificial intelligence to form a credit score according to a company’s finances. Clearly, this is a financial blueprint for tomorrow.
As evidenced, the future holds optimism for fintech companies not only for the next quarter but for many more quarters over the next few years. With technology on fintech’s side, the way people and businesses perceive money and financial processes will likely go through even more dramatic transformations.
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Securities Disclosure: I, Prashant Sharma, 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 contributed article. 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.