Have you ever wondered how digital financial services that we use every day actually work? Behind each transaction, each instant payment, and each automated investment, there is a set of companies dedicated to building the infrastructure that makes the fintech revolution possible.
In this article, we will explore the exciting world of Fintech Infrastructure Companies and their growing importance in the current financial landscape. We will discover
- How these companies are meeting the demands of an ever-evolving industry
- Advantages they offer
- What the future holds for them
Join us as we explore their impact and the key factors to understand their success.
What are Fintech Infrastructure Companies?
Fintech infrastructure companies are the backbone of the financial services industry.
These companies use APIs to offer financial products and services directly to customers, transforming the way traditional financial services are delivered.
Fintech infrastructure companies are essential for the growth and innovation of the financial services industry, and their importance is only increasing.
Fintech infrastructure companies provide the underlying technology and infrastructure that powers fintech products and services. They offer a variety of services like:
- Banking-as-a-service
- Payment infrastructure
- Compliance technology.
These services help fintech startups and traditional financial institutions to quickly and efficiently launch new products and services.
Fintech infrastructure companies are becoming increasingly popular as more companies develop fintech products and services. According to sp-edge.com, the demand for fintech infrastructure, including integrations and APIs, is increasing as more companies develop fintech products and services. Many companies are turning to fintech infrastructure-as-a-service providers to build their respective fintechs on common infrastructure platforms.
Fintech infrastructure companies are also essential for the growth of multiple unicorns and decacorns. According to accel.com, the European fintech infrastructure ecosystem has created a foundation for the growth of multiple unicorns and decacorns.
The Growing Need for Fintech Infrastructure Businesses
In recent years, the demand for fintech infrastructure companies has been very high.
The global fintech market is anticipated to reach $460 billion, or 23.8%. This is according to a Grand View Research report.
This growth is being brought on by the rise in the use of digital financial services, the development of technology-driven solutions, and the rising demand for mobile payments.
Recommended Lecture: Fintech Infrastructure Market Map
The Advantages of Fintech InfrastructureCompanies
For businesses looking to create fintech goods and services, Fintech infrastructure companies provide a variety of advantages. Among them are these:
- Speed and efficiency: Fintech infrastructure companies offer pre-built solutions that enable businesses to launch new goods and services quickly and effectively.
- Cost savings: Companies can save money on the cost of creating their own infrastructure by utilizing an infrastructure-as-a-service provider.
- Scalability: Fintech infrastructure-as-a-service providers provide scalable solutions that can handle significant traffic and transactions.
- Compliance: Fintech infrastructure companies provide compliance technology that can assist businesses in fulfilling regulatory requirements.
The Growing Need for Financial Infrastructure Companies
In the coming years, fintech infrastructure businesses are anticipated to keep growing. The fintech infrastructure market is anticipated to grow at a CAGR of 15.9% between 2021 and 2028, according to sp-edge.com. The adoption of digital financial services, the rise of technology-driven solutions, and the rising demand for mobile payments are all contributing to this growth.
In order to create their own fintechs on shared infrastructure platforms, many businesses are turning to Fintech infrastructure-as-a-service companies. These providers provide a range of services, such as compliance technology, payment infrastructure, and banking-as-a-service. These services enable businesses to launch new goods and services quickly and effectively while also saving money on the cost of creating their own infrastructure.
Recommended Lecture: How to build Fintech Infracstructure
Predictions for the Future of Fintech Infrastructure Companies
The fintech infrastructure industry is constantly evolving, and fintech infrastructure companies are at the forefront of this innovation. In this section, we will discuss the predictions for the future of fintech infrastructure companies made in the Accel article.
1: Increased Adoption of Embedded Financial Services Products
Embedded financial services products are becoming increasingly popular, and the Accel article predicts that this trend will continue in the future. These products offer financial services within other products or services, such as in-app payments or embedded insurance solutions. The article predicts that embedded financial services will become a standard feature of many non-financial products, including e-commerce platforms and social media platforms.
2: Tailored Solutions for Crypto/Web3 Natives
As the use of cryptocurrencies and Web3 technologies grows, fintech infrastructure companies will need to adapt to meet the needs of this new market. The Accel article predicts that fintech infrastructure companies will offer tailored solutions for crypto and Web3 natives, including digital wallets, decentralized finance (DeFi) solutions, and blockchain-based identity verification.
3: Emergence of European FinOps Champions
The Accel article predicts that there will be a new wave of fintech infrastructure companies emerging from Europe, focused on providing financial operations (FinOps) solutions. These companies will offer solutions that help fintech startups and traditional financial institutions optimize their financial operations and reduce costs.
4: Evolution of Open Banking into Open Finance and Eventually Open Data
The Accel article predicts that open banking will evolve into open finance, where customers will have access to a wider range of financial products and services from multiple providers. Eventually, this will lead to open data, where customers will have complete control over their financial data and can share it with any provider they choose.
These predictions show that the fintech infrastructure industry is constantly evolving, and fintech infrastructure companies will need to adapt to meet the changing needs of the market.
Recommended Lecture: Why to invest Venture Capital in Latam Fintech
| Future of Fintech Infrastructure Companies | |
|---|---|
| 1. Increased Adoption of Embedded Financial Services Products | |
| 2. Tailored Solutions for Crypto/Web3 Natives | |
| 3. Emergence of European FinOps Champions | |
| 4. Evolution of Open Banking into Open Finance and Eventually Open Data | |
The Next Generation of Fintech Infrastructure Companies
In this section, we will discuss the future of fintech infrastructure, as outlined in the mingclee.medium.com article. The article discusses three potential models for the next generation of fintech infrastructure: the marketplace model, the service-oriented approach, and the use of emerging technologies.
The Marketplace Model
The marketplace model involves fintech infrastructure companies offering a range of financial products and services from multiple providers. This model allows customers to compare and choose the best financial products and services for their needs. According to the article, this model has the potential to disrupt the traditional banking model and create a more competitive financial services industry.
The Service-Oriented Approach
The service-oriented approach involves fintech infrastructure companies offering specific financial services as a service (FSaaS). For example, a company may offer payment processing or compliance technology as a service. This approach allows companies to focus on their core competencies while outsourcing other financial functions to fintech infrastructure companies.
The Use of Emerging Technologies
The use of emerging technologies, such as artificial intelligence (AI) and blockchain, has the potential to revolutionize the fintech infrastructure industry. AI can be used to automate financial processes and improve the accuracy of risk assessments, while blockchain can be used to create secure and transparent financial transactions.
The article concludes that fintech infrastructure providers can add value by expanding on current financial functions, such as payments and compliance, and by providing additional services, such as data analytics and risk management. The future of fintech infrastructure will likely involve a combination of these models, and successful companies will likely use more than one.
Recommended Lecture: Fintech Trends in Latin America
Key Components for Fintech Infrastructure Companies
In this section, we will discuss the key components for successful fintech infrastructure companies, as outlined in the a16z.com article. The article highlights four key components for fintech infrastructure startups: mission criticality, a narrowly defined initial use case, neutrality across customers, and consumption-based pricing.
Mission Criticality
Mission criticality refers to the importance of the product or service offered by the fintech infrastructure company. According to the article, successful fintech infrastructure companies offer mission-critical services that are essential to their customers’ operations. These companies have a clear value proposition and are able to demonstrate their importance to their customers.
A Narrowly Defined Initial Use Case
Fintech infrastructure companies should have a narrowly defined initial use case, according to the article. This allows the company to focus on a specific problem or pain point and develop a solution that meets the needs of its customers. By starting with a narrow use case, companies can build a strong foundation for future growth and expansion.
Neutrality Across Customers
Fintech infrastructure companies should be neutral across their customers, according to the article. This means that they should provide the same level of service to all customers, regardless of their size or status. This neutrality helps to build trust with customers and ensures that all customers are treated fairly.
Consumption-Based Pricing
Consumption-based pricing refers to a pricing model where customers only pay for the services they use. According to the article, successful fintech infrastructure companies offer consumption-based pricing, which allows customers to scale their usage up or down based on their needs. This pricing model is transparent and helps to build trust with customers.
The article also highlights several tradeoffs that fintech infrastructure companies must consider, including whether to target developer-first or business-first buyers, optimize for speed or scale, and offer a consumer-facing brand or a white-label experience. The article emphasizes the importance of aligning value with cost in an impartial manner.
Recommended Lecture: Why banks are buying Fintechs
The Increasing Demand for Fintech Infrastructure Companies
In this section, we will discuss the increasing demand for fintech infrastructure companies, as outlined in the sp-edge.com article. The article highlights the growing number of companies developing fintech products and services and the need for fintech infrastructure-as-a-service providers to build these on common infrastructure platforms.
The Growth of Fintech Products and Services
The fintech industry has experienced tremendous growth in recent years, with many companies developing innovative products and services that are transforming the financial services industry. This growth has created a need for fintech infrastructure companies that can provide the technology and infrastructure needed to support these products and services.
The Role of Fintech Infrastructure-as-a-Service Providers
Fintech infrastructure-as-a-service providers offer a range of services that enable companies to build and launch fintech products and services quickly and efficiently. These providers offer a common infrastructure platform that companies can use to build their respective fintech products, reducing the time and cost associated with developing these products from scratch.
The Benefits of Using Fintech Infrastructure-as-a-Service Providers
Using fintech infrastructure-as-a-service providers offers several benefits, according to the article. These providers offer a range of services, including integrations and APIs, that enable companies to build and launch fintech products quickly and efficiently. They also offer a range of tools and resources, such as developer support and testing environments, that help to streamline the development process.
In addition, using fintech infrastructure-as-a-service providers can reduce the costs associated with building and launching fintech products. By using a common infrastructure platform, companies can avoid the need to build their own infrastructure from scratch, reducing the time and cost associated with this process.
The demand for fintech infrastructure companies is expected to continue to grow in the coming years, as more companies develop fintech products and services. This growth presents a significant opportunity for fintech infrastructure companies to provide the technology and infrastructure needed to support these products and services.
Fintech Infrastructure Companies Key Takeways
In this article, we have discussed the importance of fintech infrastructure companies in the financial services industry. We have explored the future of fintech infrastructure, the key components for successful fintech infrastructure companies, and the increasing demand for fintech infrastructure-as-a-service providers.
As the fintech industry continues to grow and evolve, fintech infrastructure companies will play a critical role in enabling companies to develop and launch innovative products and services. By providing the technology and infrastructure needed to support these products and services, fintech infrastructure companies are driving innovation and transforming the financial services industry.
We hope you enjoyed reading this article and learned something new about fintech infrastructure companies. If you’re interested in learning more about the fintech industry, be sure to check out our other great content.
Fintech Companies Latam
UbankU
Defi bank focus on improving the financial inclusion for the GenZ. Financial industry doesn’t know anything about Genz and there´s a 2.5B billion market worldwide.
Ubanku, starts being the first step of the financial life for them, with a frictionless marketplace that can save money with a cashback of products and services of the university life, access to micro loans, all this, while they learn about finance, this allow us to create an innovating score system to connect GenZ with other financial products.
Creditop
Creditop is a loan aggregator that processes any credit request by centralizing lenders and connecting customers with their ideal loan.
We have disbursed +$7.5M in mortgages, car and personal loans with a profitable pricing model in each transaction.
Our mission is to improve life quality through credit efficiency in LatAm. Founders:
INI
Ini, a SaaS and white label fintech platform that allows any -wannabe fintech-company to scale their own payment network and expand their ecosystem into new markets and territories without losing the core focus of their businesses even when there is no connectivity access.
Inipay ́s IP tech (POS terminals + alternative connectivity) is also an enabler to reach new markets and niches such as events, concerts, stadiums, national parks, tourism and hospitality.
Aviva
Aviva is an AI startup following a unique approach to unsecured and productive credit for the underserved communities in Mexico.
Now imagine you are an unbanked person and all that you need to do for getting your first loan is having a face-time call. They have a great experience building Konfio (Mexican Unicorn). Founders:
Koban
A digital financial services platform for Bolivia, Paraguay, Ecuador and Peru; where the vast majority don’t have access to financial services or are drastically underserved by traditional banks.
Koban allows users to perform an array of financial services including online and offline payments, money transfers, budgeting tools and credit solutions, among other services for consumers and SMBs in the region.
Zenpli is an infrastructure focused SaaS working on putting a stop to the KYC and fraud challenge in LatAm.
Through 1-single integration, LatAm fintechs and other digital innovators seamlessly onboard more good customers by accessing best-in-class data across all domains and running accurate end-to-end identity decisions supported by advanced models that are hard to spoof.
We’re rolling our product with Mastercard in Mexico in Q4 2022 with the potential to generate ~500k in ARR over the next 12-months.
We’re backed by The Fintech Fund, Ralicap, Amador, Newtopia and world-class angels and advisors from C-level and VPs at Socure, EPAM, Konfío, R2 and Bureau.id.
Kashin
Kashin (YC S22) is Square with working capital for micro-merchants in LATAM.
We control risk with collaborative credit scoring and our vision is to become the primary financial platform for the masses.
Before Kashin, the founders led Cabify, the largest regional Uber competitor, and grew it from 0 to $50m in annual revenue.
Wibond
Buy now, pay later without credit cards.
WIBOND is a digital payment method to pay in small installments and without the need of a credit card.
It shows the best payment options according to each customer’s possibilities so they can enjoy their favorite products.
Tapi
Tapi is a Fintech B2B. Next-generation API-first network for billers, partners and their clients to re-envision the way bills get paid in LATAM.
Z1
Z1 is the Brazilian Gen Z neobank, where teenagers and young adults can begin their journey to financial independence.
Through Z1’s banking app, users can send and receive money from parents, employers or clients from their side gigs, as well as spend the money through a physical and virtual card.
Botin
BOTIN is an investment super app and a one stop shop to trade traditional and non-traditional assets; its vision is to make the wealth generation tools of the 1% available to all.
Through its Neo broker stock trading app gives users a simple and direct access to invest in different assets across multiple industries and territories (e.g., ETFs and stocks from USA, real estate, crypto, tokens, and others).
BOTIN is focused in helping 300 million people in Spanish speaking Latin America to protect their savings and have an option for retirement.
Yuno
YUNO wants to bring to Latin American companies an easy online checkout solution that solves the pain point of managing multiple payment methods, as well as fraud detection tools, which can be costly and painful to manage.
Fintech Infrastructure Companies FAQs
Who needs fintech infrastructure companies?
Fintech startups and traditional financial institutions need fintech infrastructure companies to create and support their financial products.
What services do fintech infrastructure companies provide?
Fintech infrastructure companies provide a range of services, such as integrations and APIs, that enable companies to build and launch fintech products quickly and efficiently.
How do fintech infrastructure companies benefit businesses?
Fintech infrastructure companies offer a common infrastructure platform that reduces time and costs associated with building fintech products from scratch.
Who are some notable fintech infrastructure companies?
Notable fintech infrastructure companies include Plaid, Stripe, and Finicity, which provide a range of services to support fintech products and services.
What is the future of fintech infrastructure?
The future of fintech infrastructure lies in the emergence of embedded financial services, tailored solutions for crypto/web3 natives, and the evolution of Open Banking into Open Finance and eventually Open Data.
How do fintech infrastructure companies ensure neutrality across customers?
Fintech infrastructure companies ensure neutrality across customers by providing the same level of service to all customers, regardless of their size or status.
What is consumption-based pricing for fintech infrastructure companies?
Consumption-based pricing is a pricing model where customers only pay for the services they use, allowing them to scale their usage up or down based on their needs.
