Investing in fintech research

The term “fintech” (financial-technology) is used to refer to companies and service providers who exploit modern technologies, such as computer engineering and applied statistics, to financial business. Fintech is an invisible servant of whom most of us take advantage nowadays – every time you spend money or receive money that is not printed on paper, you’re most likely being helped by financial technology.

As payment processes are evolving into more convenient and quick versions, research on financial technologies is the fuel that allows the progress to continue and the goals to be achieved. The growth margin is still wide-ranging and the market saturation is far from being reached. For these reasons, investing on fintech, and investing on fintech research specifically, is one of the most interesting investment opportunities in the current scenario. 

Why invest in fintech companies?

Fintech is a growing sector with exciting potential; previous to 2020, fintech companies were on a wave of great and consistent growth, and, even with the 2020 crisis, fintech companies suffered less than many other businesses in other areas of economy. 

If we looked at the numbers, we’d see that in 2020 the global investments on fintech was $25.6 billion, while in 2019 the total amount was $37.9 billion. The 2020 crisis hit this sector just like it hit many others, but with less evident consequences. Furthermore, experts do not believe that  the crisis will affect the future growth perspectives very much, and fintech is expected to grow at a rate of nearly 20% a year for the next 5 years, with an unanticipated market value of around $305 billion in 2025.

Types of fintech stocks

As you probably understand, fintech is quite a broad term and applies to any business that exploits technology for financial purposes. For this reason, the product fintech companies actually sell are varied and include:

• Online banking and mobile banking
• Person-to-person payments and money transfer
• Payment processes
• P2P lending
• Financial software development
• Other financial services

Now, you’re probably thinking that many companies offer this type of services, on their own or thanks to different partnerships, and that is true, but some companies are more into fintech than others; here are some examples of companies who largely invest on fintech research to improve their fintech offer:

• PayPal
• Goldman Sachs
• Square
• Green Dot
• Mercado Libre

How to start investing in fintech 

If you’re interested in investing in fintech, you have a few different options with which you can start. Investments on fintech mainly divide into two categories: ETFs and stocks. 

ETF stands for exchange-traded funds and investors use this in order to be provided exposure to multiple companies in a single operation. 

Stocks are also an option, but, since this market is particularly active, new companies pop up every day like mushrooms, and that makes it hard for investors to choose the company in which they want to invest. 

Regardless of what option you choose for yourself, make sure to carry out some sort of market analysis before placing your investment, and exploit the various advice we provide along with your own research in order to achieve the best understanding and invest your money wisely.