April 10, 2017 Comments (0) Views: 3505 April 2017, Short Stories, Startups

Next Big Thing: Fintech

It’s not a household word yet, but it will affect how you manage your money

Hear “fintech” in sunny San Diego, and the average person might imagine fishing or surfing, although the term has nothing to do with the ocean. It’s not a household word yet, but it will affect how we all do banking, manage our money, make purchases, and even obtain insurance.

What Is It?

If you’ve used Apple Pay on your smartphone at the convenience store or Venmo to give money owed to a friend, then you’ve dabbled in the latest fintech, or financial technology.

Industry e-payment giants like PayPal fall under fintech, as does tax software developer Intuit, or any app that lets you access your checking account from your phone. Morningstar says personal financial management, insurance, payments, and asset management fall under the umbrella of fintech, but mobile payments and apps are getting most of the attention right now.

Don’t Mess with My Money!

As financial services go digital and into the cloud, companies need to stay ahead of hackers. Experts say security breaches are a “when,” not an “if.” This is where San Diego could have the biggest impact on fintech: It’s a cybersecurity hub with 51,000 workers at ESET, iBoss, and dozens of startups. The tech that keeps your money safe could very well be made in SD soon, if it’s not already.

“Silicon Valley is coming.”

—A warning from JPMorgan Chase CEO Jamie Dimon in his 2015 annual letter to shareholders, about startups and new technology being the biggest competitor to traditional financial institutions

By the Numbers

69 percent of Americans today use financial apps
Source: Prosper Marketplace 2015 survey

1-3 apps are used per person, on average, to manage money
Source: Prosper Marketplace 2015 survey

2 billion people around the world without access to traditional banks will use digital and mobile banking by 2030
Source: Bill Gates, Gatesnotes, 2015

VC dollars for financial services in San Diego
Winter 2015: $8.3 million
Fall 2015: $10 million
Winter 2016: $30 million
Source: Thomson Reuters/PwC