How FinTech Startups overtake traditional banks – 7 examples from the Innoloft network


Banking & Finance

Online-payments are becoming more and more critical for many businesses. In 2018, 6.4 billion transfers were made in Germany alone. And according to a Statista forecast, approximately 2.35 trillion euros will be realized worldwide in B2C e-commerce. The mostly old-fashioned, slow systems of many banks hinder these processes enormously. Disruptive FinTech Startups offer a faster, alternative approach.

In today’s increasingly fast-moving society, the focus shifts to more important things and complicated processes such as manual transfers or post-identification procedures don´t fit in the present time. With the new European directive “PSD2” further authentication steps have become necessary for security. The fast adaptation of important changes is the decisive argument for startups. This is one of the reasons why the fast registration, the simple handling and the innovative image of FinTech Services are so interesting especially for younger target groups. These required payment & authentication solutions are implemented by FinTech Startups as end-user-oriented solutions. We present you seven FinTech Startups from our innovationnework operating in these areas.

 

Seven FinTechs represented from the Innoloft network

 

TransferWise – Money without Borders

 

Conventional banks often lure customers with “free, cross-border transfers” and thus create the impression that they do not take any commissions for the currency transfer. However, if one looks at reality, one often does not see which exchange rate, which was usually chosen for the clear advantage of the bank, was used for the calculation. With more than 1,000 country combinations in 49 currencies and true medium exchange rates, TransferWise offers a business model that sounds too good to be true. The FinTech easily outperforms most banks in terms of transparency and performance. TransferWise takes low and above all completely transparent transfer fees and thus offers a real alternative when it comes to money transfers abroad.

 

AUTHADA – Simple authentication anytime and anywhere

 

Since 2010 the electronic identity card offers the possibility to verify oneself on the internet. This principle is also used by AUTHADA, which offers an authentication solution that enables simple verification via mobile phone. All the user has to do is hold his identity card on his mobile phone and the data is transmitted via NFC. For security reasons, the app requires the previously defined eID-pin of the ID card. A stand-alone, but also a white label option for implementation in both online and onsite applications makes the service suitable for adapting to many different applications. Thus the Startup would like to use the potential of the eID clearly more and replace it by the fast and flexible method Post-Ident and Skype-video-verification.

 

Bluecode – Digital Payments with no new account

 

Why do I need a new bank account with every mobile payment provider? The Austrian FinTech Bluecode also asked itself this question. The team has come up with a solution that makes it obsolete to have to use additional accounts and at the same time significantly speeds up the payment process at the checkout. Once registered and with the current account with direct debit authorization deposited, Bluecode offers payment by barcode. So-called Bluecode tokens are generated to make payments “scanable” directly on the mobile phone. With the implementation of certain customer cards and benefit systems, Bluecode also offers the advantage of not always having to carry all cards around with you. Bluecode cooperates with Alipay in a trans-European-Chinese alliance in order to establish itself as a counterweight to the American companies Google Pay and Apple Pay.

 

Tabbt – Time is money or money is (shared) time?

 

Whether it’s a barbecue, eating in a restaurant or tickets to the festival. It happens almost every day that colleagues, acquaintances and friends lend each other money when, for example, someone has no or not enough cash. In order to prevent annoying voucher collecting, the Tabbt-app offers an easy way to send money directly to other people. The transfer is usually received by the recipient after one business day. Tabbt is the first payment provider to pursue a so-called “zero knowledge” security concept, in which all sensitive data such as pin-codes or account numbers are not visible to the startup and enable the smartphone to communicate directly with the bank in encrypted form. Combined with the simple handling, this results in a free, fast and simple payment provider with the focus on making daily life of its customers much easier.

 

Adyen – Payment-technologies that suit every need

 

Adyen, which roughly means “start from scratch”, offers versatile payment-solutions for every need. The founders saw the possibility of a unified payment system for companies that have more than one sales channel and are easy to use. No matter whether directly in the shop, at the delivery service or mobile at the ride-sharing platform. Thanks to the anonymous evaluation provided, the startup not only offers the payment service, but also the possibility of analyzing the data to improve the sales processes. Thanks to the flexible design, the company has already secured well-known customers such as eBay, Spotify and Uber. In addition, Adyen also offers end user value through standardized payment options and a benefit system. In the long run Adyen tries to implement this standard as “Unified Commerce”.

 

IDnow – Verification by artificial intelligence

 

Hybrid identification solutions through the advantages of man and machine. This is how IDnow could be summarized in one sentence. The startup focuses on a mixture of machine learning and trained identity and fraud specialists in order to achieve enormous reliability with 99.95% correct identifications. Above all, IDnow can be used in areas such as finance, telecommunications and eCommerce with compliance with many security standards such as the DSGVO and continuous auditing. The end user, for example, only scans the image of an ID document with his smartphone and then his face, which is verified in seconds. This ease of use allows the startup not only to significantly improve the end user’s onboarding experience, but also to significantly improve the conversion rate.

 

Klarna – A payment a day keeps the trouble away

 

The Swedish based bank Klarna offers online shoppers all over the world the possibility to freely choose how they want to pay. Whether by invoice, in instalments or directly by bank transfer, the Startup offers the right payment model for every customer. With over one million transactions per day and 2500 employees, Klarna is already one of the heavyweights among FinTech companies. Through continuous development in all areas, Klarna is able to offer its customers an even better user experience. One-click payment options, push messages for due dates or pausing instalment payments are just a few of the numerous convenience functions for users. Klarna stands out from many of its competitors with its strengths in flexibility and excellent buyer protection.

 

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