The Fintech revolution powered by Smart Data is happening. Startups are disrupting financial technology that remained unchanged for decades. The new non-bank lenders adapt to emerging technologies and manage to integrate them into risk management, customer relationship management and pricing in order to enhance the service. The Fintech revolution is not about killing the banks, it’s rather about significantly improving the long-existing service by focusing on ever-growing customer needs for speed and inclusivity. And, due to increasing customer expectations and the ability for Fintech entrants to match the demand, there is no doubt that it will reshape personal finance and the way we look at it.

Better risk assessment

The new technology-enabled Fintech entrants are not afraid to experiment with technology when it comes to underwriting. They come up with new, clever ways to assess the risk. Data-driven lending has clear advantages: the service in many cases is supported by self-learning algorithm, which minimizes the need of human interference in decision making. That translates into better risk assessment and decision making. By utilizing self-learning technology in risk assessment, companies become more automated, disrupting existing banking and credit systems. That’s why Fintech is sometimes referred to as algorithm-based banking.

Cost-cutting

Fintech disrupters are not burdened by legacy IT systems or branch networks, giving them an advantage over banks. The new entrants are also not overwhelmingly big which makes them flexible for change whenever needed. Such tendency to promptly adapt to changes and integrate technology into risk management and customer service is reflected in service level of companies and overall economic efficiency. The outcome – cheaper, faster and better quality personal finance services resulting in a larger population of satisfied customers.

More diverse credit landscape

Banks usually position themselves in one location before they expand, whereas Fintech firms can start lending despite their initial placement. The lack of geographical concentration allows the new Fintech disruptors to expand into a more diverse credit landscape and scale. Simply put, the new players have an opportunity to offer credit products to parts of the market that have been underserved by the big banks.

Higher customer reach

Online presence of the new Fintech businesses makes service more accessible, quick and user-friendly since customers can easily navigate, choose and compare the offers online regardless of location or time. Keeping in mind the efficient use of technology, decreasing costs of web-based technologies and an ability to match ever-increasing customer expectations on speed of service, attracts even greater amount of customers. Trouble-free and straightforward process of non-bank personal lenders is yet another favourable addition that sways a great number of customers, out of whom a large chunk is underbanked.

Matching ever-changing customer expectations

The changing way of doing business with the help of technology shapes customers’ expectations: they expect that anything can be done online through mobile devices and are seeking for personalized products with a simple application that can be performed in a speedy manner, such as a “one-click” loan. E-commerce and digitalization of services have shaped customer expectations and therefore has put pressure on banks to match the offer. Big organizations, however, are usually too big to change, whereas the new entrants are both able and willing to adapt to changes to meet customer demands for speed and access. It’s obvious that Fintech revolution is changing the way personal finances are being handled and such change affects both businesses and customers. Fintech companies are successfully implementing the change, the main question is – will the banks keep up?

Today marks the start of the Startupbootcamp Internet of Things & Data accelerator program that, over a period of six months, will see ten select entrepreneurs and their startups develop their offerings to rewarding outcomes.

Focusing on Internet of Things & Smart Data, the global startup accelerator provides these ten startups with support, mentorship, and connections. Managing Partner and Co-Founder of the programme Ángel García described the selected squads as showing “a high level of motivation, dedication, willingness to work hard and the ability to adapt themselves to change and innovation.”

The program was initiated in August 2014, receiving 250 applications, and after twelve Pitch Days around the world and over 150 pitches in total, 10 finalists were announced in December. These finalists have devised disruptive solutions with connected devices and the immense associated data these machines create, explains Startupbootcamp.

Here are the 10 startups chosen, and what they had to say about their products:

• Balázs Weibel, CEO of Cubilog (Hungary): “We save the user time and money by connecting all the smart, semi-smart and dumb/wired devices to one hub and one app. The user can get rid of any other hubs and apps and still control all the devices from one dashboard.”
• Nacho Lafuente, CEO of Datumize (Spain): “We have created a software solution for corporate clients that captures and stores large amounts of data with more efficient energy savings.”
• Frank Hoonakker, President of eNovalys (France): “We offer a new way to manage, share and exploit the unpublished scientific data which is 97% of the scientific production! With our technologies, we will change the paradigm of making science and accelerate the process of creating drugs.”
• Richard Lagrand, co-founder of Muzze (Netherlands): “We help curators and museums to unlock their untold stories trough an app that lets you create an audio tour in three simple steps.”
• Sergio Mottola, CEO of Nuwe (United Kingdom): “Our committed aim is to develop powerful digital health services and, as a result, contribute to the overall well being of society.”
• Blai Carandell Saladich, CEO of Oasys (Spain): “We have the aim to become a central place for the home, a technology that unites families in a unit and with life’s most important resource: water.”
• Morten Poulsen, CEO of Plytix (Denmark): “We provide a more transparent product based web analytics platform with a tool that enables brands to track the sales data of their products across retailers’ websites.”
• Markus Kopf, co-founder of Teraki (Germany): “Teraki wants to be for the IoT what MP3 is for the music industry: our solution employs newest techniques to reduce the amount of data generated by sensors by up to a factor 10 without compromising its quality.”
• Iván Caballero, CEO of The Social Coin (Barcelona): “The Social Coin’s mission is to improve people’s life through fostering and giving visibility to Acts of Kindness. With more success in business, there is more social impact”.
• Marc Fàbregas, CEO of Zolertia (Spain): “We will enable everyone in the world to immerse and create all kind of awesome IoT applications, with an easy and ready-to-use hardware that will let people connect with their things in the same simple and powerful way people are connecting today through Internet.”

2015 looks to be an exciting year for these ten finalists.

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(Image credit: Startupbootcamp)