Abra to Adven, Klarna to iZettle … How AI, blockchain and big data are disrupting the “fintech” future of finance

August 8, 2018

FinTech innovations have been at the forefront of tech disruptions in recent years. By the end of 2017, there were more than 30 FinTech unicorns globally, including European companies such as Klarna, Adyen, and Transferwise.

In particular it is now the disruptive impact of blockchain, big data and most significantly AI, that are driving dramatic rethinking of the future of financial services – from banking and savings to investments and payments – enabling a new generation of brands to breakaway from the legacies of big banks, and traditional processes.

It is not surprising that established banks are seeking to partner with FinTech startups to reinvent their business models: in 2016, more than €22 billion was invested in FinTech worldwide. StartUs Insights analysed 14.000 FinTech startups, to identify technologies that will cause major disruptions in the financial industry in the near future.

This is their summary map:

Mobile Banking

Mobile banking has come a long way: from SMS Banking, which first appeared in 1999, to today’s smartphone banking apps that allow for mobile payment and management of all banking and financial services on-the-go. Not only does mobile banking reduce location dependency of financial services and operation costs, but it also provides an end-user interface for the expansion of Banking-as-a-Platform (BaaP).


A cryptocurrency frenzy over the past two years is how most people got introduced to the blockchain. Aside from using cryptocurrencies for private and fast online transactions, blockchain provides a transparent, secure, immutable and reliable ledger to document contracts, transactions, and records. Innovations such as Blockchain Bonds, blockchain clearing, and settlement systems have already been used to make intra-bank and inter-bank transactions cheaper and faster.

Big Data

In addition to traditional financial data collection, new data sources such as mobile banking and the Internet of Things (IoT) provide an additional layer of data gathering. Combined with Artificial Intelligence, Big Data analytics utilize large amounts of old and new data to discover hidden patterns for better risk management and fraud detection. New insights from big data improve the understanding of customer behaviors and help banks to create better and more customized products and services.

Artificial Intelligence (AI)

AI helps banks to analyze their Big Data to improve existing solutions and make better decisions. A more recent AI trend is to use its cognitive abilities to go through a large amount of unstructured text and data to generate more insights and to learn natural language. A more intelligent AI chatbot or virtual assistant can take over repetitive “low-value” operations, such as performing small amount transactions, explaining financial products and providing basic financial advice to customers.

Regulatory Technology (RegTech)

Most RegTechs are services and tools using Big Data and Cloud Computing to enhance a company’s ability to monitor, report and comply with regulatory requirements. These startups use AI and predictive analytics to automate compliance tasks, reduce risk fraud, perfect authentication and identity management. As global banking regulations become ever complex, RegTechs help banks to increase transparency and consistency, while lowering the cost of compliance.


Biometric technologies are often seen as the holy grail of data safety and security. They use physically unique features of an individual, including fingerprints, face, voice, retina, and other forms of recognition to enhance security and identity verification. With more smart devices equipped with better sensors, banks are able to safeguard their users, prevent cyber crimes, and identity theft better than ever.

Open Banking Application Program Interfaces (APIs)

Among the innovation areas mentioned in this article, Open Banking APIs may have the largest disruptive impact on the traditional banking model. Through open APIs, banks give not only users but also partners more transparency and access to banking data and encourage the creation of new value chains and services. Until recently, Banking-as-a-Service (BaaS) was seen as the main model of how FinTech startups leverage Open APIs to create new services and products that improved the banking experience for consumers and generated value. Baking-as-a-Platform (BaaP), seen as the next Open API model, allows banks to provide curated third-party different financial services and products to customers. It allows banks to retain control of customer data and ensure the quality of services provided on their platform.

Disruptive Startups

  • Monese is a complete mobile banking company that significantly simplifies the process of opening a bank account in the UK (“instant account for mobile people”). Additionally, the startup enables users to send money abroad, receive salary transfers, and pay bills among other functionalities – all by smartphone.
  • Having raised roughly 12€ million to date, Abra takes full advantage of the blockchain technology to merge money transfer and payments by a digital cash wallet that works worldwide. No bank or other traditional organization is participating in managing, storing, sending, or accepting funds. The startup seeks to enable the purchase and storage of digital currency like Bitcoin directly on the smartphone, getting around the issue of lack of local exchanges.
  • Cignify makes use of big data to meet the needs of millions of people owning a smartphone but having no access to financial services. Through analyzing data solely from smartphones, they are able to create valid credit risk scores.
  • French startup Cognitiv+ has built an Artificial Intelligence Engine capable of identifying topics of interest in unstructured text as well as relationships between topics, companies and more. For financial institutions, AI can be used to gain quick and thorough insights into their legal documents by analyzing data from legislation and contracts.
  • The core activity of the London-based startup Percentile revolves around the needs of risk officers working in capital markets. With the help of “automation, good data management and removal of the black box and spreadsheet-driven risk processes”, Percentile achieves greater transparency and consistency for internal and regulatory needs.
  • Swedish iZettle counts as one of the front-runners enabling payment via smartphone, tablet, and the web. The functionalities of this startup’s solution are available to developers, also allowing them to integrate it with their own, thus creating new apps and services.
  • By working on predicting a user’s identity by their typing pattern, Romanian startup TypingDNA takes the application of biometrics in FinTech further. Their ambition is to use biometric typing, also known as keystroke dynamics, to protect ePayments, SaaS, apps, and devices. Developers can secure an application simply by typing biometrics through their application program interface (API).

The finance industry has already experienced many changes and disruptions caused by FinTechs. Technologies such as mobile banking, mobile payment, and biometrics have changed how many consumers interact with their banks and financial institutions every day. Blockchain and cryptocurrencies have become a known phenomenon in recent years, but their real disruption potential in the financial industry has yet to be seized. Other less visible FinTechs in the areas of BaaP, RegTech, Big Data, and AI will bring fundamental change to the business model of banks. Traditional banks need to move fast in order to adapt to the next wave of disruption.

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