06 Environment

🎤 Expert’s voice

We will feel the impact of 2020 for years to come.

Konsantinos Kalogerakis Crowdpolicy new

The name of the game, now more than ever, is speed

The COVID-19 effect reshuffled market dynamics during 2020. Its impact not only boosted acceptance of everything digital on the end-user side but also brought to light a lack of readiness and agility where it existed.

On a positive note, the financial infrastructure adhered quite well, and most players in the fintech ecosystem were highly responsive, from incumbents to newcomers. In this new environment, Big Tech is poised to forge ahead, and we saw an increase in their activity, which started even before the pandemic, for example, with the launch of Apple Card.

On the other hand, some fintechs took advantage when their offering tackled urgent user needs, as in the cases of buy-now-pay-later (BNPL), personal financial management (PFM), and e-commerce payments.

Overall, we observed significant changes in specific verticals of the fintech space, with everyone playing catch-up as things evolved rapidly. The name of the game, now more than ever, is speed.

COVID-19 has accelerated the progression to a post-fintech world

The impact of 2020 will be felt for years to come. There is no question that we will be talking about a completely new and post-fintech world, much earlier than anticipated. Fintech is already the de-facto state of play in financial services. Users will continue to be educated in digital customer journeys across all sectors. Startups will continue to discover new use cases leveraging deep tech. And traditional banks will either follow this trend to become totally customer-centric or risk market marginalization.

In 2021, the digitization of every front and back office will continue to transform the landscape for the traditional players, and there is a huge opportunity for B2B fintechs to support this transition.

For B2C players, it will be particularly challenging to sustain growth if their business model does not apply to the new customer demands, so the polarization between the winners and losers will be more evident in 2021.

National policies are supporting the growth of fintech companies

Many countries have acknowledged that fintech is a dynamic sector with high growth potential building on the omnipotent banking sector. For example, in Europe, fintech growth in the past few years has been driven first by open banking in the UK and second by the PSD2 (Payment Services Directive) regulation that came into force in 2019. This is a fine example of how policies push market evolution.

There is now a whole ecosystem of hundreds of Trusted Third Parties (TTPs) with licensed access to banking data that raise capital and grow in different markets. For the time being, there is still fragmentation and not many scaled cases across Europe, but this will change, especially now, post-covid.

Another example is the increase in the number of regulatory sandboxes offered by central banks that promote experimentation and innovative business models.

The regulatory environment is a critical part of the fintech ecosystem. As we move from physical to digital interactions with an accelerating speed, regulations will, rightfully so, focus on various risk factors concerning cybersecurity and data handling. As a consequence, innovators will need to navigate these complicated waters carefully.

In the next few years, the trend of open banking will evolve into other areas such as lending or investing. In Europe, we will see a revised PSD2 towards a Financial Services Directive, not only Payments.

This broader scope will facilitate many more use cases in the hot trend of embedded finance, according to which, every company will integrate fintech solutions. Running a fintech business will therefore be much more exciting and dynamic.

Remote working gives smaller hubs the opportunity to attract fintech startups

The most friendly places to start a fintech business are those where there is a concentration of human capital, a friendly regulatory environment, rich funding mechanisms, and a scalable market.

In the Western world, the usual suspects are, for example, San Francisco, London, New York, and Berlin, and towards the East, we have Singapore and Hong Kong. But with the new remote work conditions, there are many more opportunities for smaller peripheral hubs to reposition by attracting talent.

📊 Agile Responses to the Pandemic

The COVID-19 pandemic may have caught the world by surprise, but fintech companies were quick to respond with new products and services to support their customers. To compile this list, we looked for ten of the most interesting and inspiring stories of businesses adapting to meet the demands of the new reality, and in some cases, working together to achieve new capabilities.

1. Trade Ledger

Helping SMEs access funding digitally through the formation of a fintech task force

Trade Ledger, a digital lending platform, joined forces with three UK-based fintechs – Nimbla, Wiserfunding, and NorthRow – to create a turn-key origination and underwriting platform. The joint-lending platform gives businesses digital access to much-needed funds from banks, private debt lenders, and alternative lenders as they navigate the pandemic.

HQ Location: London, United Kingdom

Website: tradeledger.io

Social media: LinkedIn / Twitter

2. Kabbage

Developing the technology to allow shoppers to buy gift certificates from local businesses

Kabbage, an online small business lender, launched a platform that allows consumers to buy gift certificates from local small businesses to support them during the pandemic. The company developed the platform in three days working in collaboration with other fintechs, including Finix, Fundera, and Lendio.

HQ Location: Atlanta, United States

Website: kabbage.com

Social media: LinkedIn / Twitter

3. Nimbla

Safeguarding UK SMEs against insolvent customers and helping to maintain cash flow

Nimbla, an invoice insurance provider, combined strengths with fellow fintech Wiserfunding to increase the accuracy of risk assessment. The partnership allowed Nimbla to improve the availability and pricing of commercial credit insurance to SMEs, protecting them against insolvency at a critical time.

HQ Location: London, United Kingdom

Website: nimbla.com

Social media: LinkedIn / Twitter

4. NorthRow

Enabling companies to rapidly digitally transform onboarding and compliance processes

NorthRow, a provider of anti-money laundering compliance solutions, launched its WorkStatus app to help companies maintain compliance, even if employees are working remotely. The app allows companies to verify a prospective employee’s Right to Work eligibility in minutes, from anywhere, at any time.

HQ Location: London, United Kingdom

Website: northrow.com

Social media: LinkedIn / Twitter

5. Innovesta

Providing investors and businesses with risk insights using a rating score

Israeli fintech Innovesta helps businesses to de-risk their financial decisions with Innodex, its flagship product that provides AI-driven rankings of private companies and their assets. In response to the pandemic, the company added CRI – the C0VID-19 Resilience Innodex – which rates a company’s ability to weather the effects of the pandemic.

HQ Location: Tel Aviv, Israel

Website: innovesta.co

Social media: LinkedIn

6. iwoca

Extending iwoca’s lending capabilities to over two million businesses via a new platform

When the pandemic struck, business lender iwoka launched OpenLending. The platform allows banks, fintechs, brokers, accountants, and bookkeeping platforms to offer their customers lending decisions and access to funds in seconds – powered and backed by iwoca.

HQ Location: London, United Kingdom

Website: iwoca.co.uk

Social media: LinkedIn / Twitter

7. nCino

Optimizing institutions’ lending capabilities for the Small Business Association's PPP

Following the US government’s announcement of the Paycheck Protection Program (PPP), cloud banking leader nCino developed a digital solution to help financial institutions quickly deploy COVID-19 relief. The solution, which can be implemented in less than three days, is a complete end-to-end system for SBA loan processing.

HQ Location: Wilmington, United States

Website: ncino.com

Social media: LinkedIn / Twitter

8. ODX

Assisting lenders to provide business owners with unprecedented levels of funding

ODX, a provider of automated end-to-end business lending solutions, reconfigured its existing platform to meet the needs of the CARES Act and the Paycheck Protection Program (PPP). Its automated PPP solution helps lenders expedite the transfer of capital to small businesses around the country.

HQ Location: New York, United States

Website: odxsolutions.com

Social media: LinkedIn

9. Lendio

Facilitating the forgiveness application process for PPP loans

Lendio, a leading marketplace for small business loans, partnered with financial institutions to provide a scalable technology solution to support the loan forgiveness process, the next phase in the PPP initiative. The company also offered dedicated loan forgiveness agents as an option to provide end-to-end loan forgiveness support.

HQ Location: Lehi, United States

Website: lendio.com

Social media: LinkedIn / Twitter

10. Yoello

Supporting hard-hit local businesses with a mobile app that connects them with buyers

Award-winning payment platform provider Yoello partnered with FOR Cardiff to launch a mobile app that supports local hospitality and retail businesses struggling due to social distancing restrictions. The platform allows merchants to create a shop page to sell their products and services during lockdown, providing vital cash flow.

HQ Location: Cardiff, United Kingdom

Website: yoello.com

Social media: LinkedIn / Twitter

🤑 Biggest IPOs in 2020

Although 2020 was a year characterized by uncertainty, a raft of fintech companies braved the conditions and went public. Many were hugely successful, with several raising significant sums to fuel further growth. To bring you this list of the biggest IPOs in 2020, we used data from leading sources, including Crunchbase, and ranked companies by their valuation at the time of the IPO.

1. Root Insurance

Car insurance provider disrupting the industry with mobile app-powered pricing

Currently operating in 30 states in the USA, Root Inc. offers car insurance based on data from its mobile app which assesses how customers actually drive, not their demographics. The company also works with carriers and fleet owners through Root Enterprise.

HQ Location: Columbus, United States

Valuation: $6.732B

Industry: Insurance

Website: joinroot.com

Social media: LinkedIn / Twitter

2. Nuvei

Payment technology partner aiming to make the world a local marketplace

Nuvei unites payment technology and consulting to help businesses succeed locally and globally. Its platform supports more than 450 local and alternative payment methods and 150 currencies, offering customers direct connections to all major payment card schemes.

HQ location: Montréal, Canada

Valuation: $3.4B

Industry: Payments Processing & Networks

Website: nuvei.com

Social media: LinkedIn / Twitter

3. nCino

Global leader in cloud-based software for financial institutions

The nCino Bank Operating System empowers banks and credit unions with scalable technology to drive revenue growth, efficiency, and regulatory compliance. The company works with more than 1,200 financial institutions worldwide.

HQ location: Wilmington, United States

Valuation: $2.77B

Industry: Core Banking & Infrastructure

Website: ncino.com

Social media: LinkedIn / Twitter

4. Upstart

AI-powered lending platform working to expand access to affordable credit

Founded by ex-Googlers, Upstart is on a mission to enable fair and fast access to credit based on true risk. The company’s AI-based lending platform allows banks to offer higher approval rates and deliver an exceptional digital-first customer experience.

HQ location: San Carlos, United States

Valuation: $1.78B

Industry: General Lending & Marketplaces

Website: upstart.com

Social media: LinkedIn / Twitter

5. StepStone Group

Global private markets firm offering customized investment and advisory solutions

StepStone prudently combines fund investments, secondaries, and co-investments across all asset classes. The firm has over $333 billion of total capital allocations, including more than $80 billion in assets under management.

HQ location: La Jolla, United States

Valuation: $1.7B

Industry: Asset Management

Website: stepstoneglobal.com

Social media: LinkedIn / Twitter

6. Lemonade

AI-powered homeowners, renters, and pet health insurance driven by social good

Lemonade provides homeowners, renters, and pet health insurance based on AI and behavioral economics. The company is a certified B-Corp and donates unused premiums to selected non-profits as part of its annual Giveback program.

HQ location: New York, United States

Valuation: $1.6B

Industry: Insurance

Website: lemonade.com

Social media: LinkedIn / Twitter

7. Paya

Leading provider of vertically-tailored integrated payment solutions

Paya has built its foundation on providing frictionless solutions that help customers make and accept payments and increase operating efficiencies. The company is a top 20 payment processing provider in the US, with annual payment volumes of over $30 billion.

HQ location: Atlanta, United States

Valuation: $1.3B

Industry: Payments Processing & Networks

Website: paya.com

Social media: LinkedIn / Twitter

8. Ccoin Network

Cryptocurrency and blockchain solutions promising instant transfers and no fees

Ccoin Network was created to solve the problem of high fees, slow payment execution, loss of value, and low security in cryptocurrency and banking. The project is led by three companies who have their own blockchain known as 'SourceLess Hybrid Blockchain.'

HQ location: Constanta, Romania

Valuation: $566.7M

Industry: Crypto

Website: ccoin.uk

Social media: LinkedIn

9. Mode

Bitcoin app with a vision to build a next-generation financial ecosystem

Mode’s financial app helps users to access their GBP, EUR, and BTC accounts and grow their digital assets in one place. The company’s goal is to develop a super app that combines the best in digital assets, payments, investment, and loyalty.

HQ location: London, United Kingdom

Valuation: £40M

Industry: Crypto

Website: modeapp.com

Social media: LinkedIn / Twitter

10. Open Lending*

Automated lending platform for automotive lenders throughout the United States

Open Lending’s goal is to empower consumers to get the best loan their risk status will allow. Leveraging big data in risk modelling, loan analytics, and risk-based pricing, the company enables lenders to increase loan volumes without adding significant risk.

HQ location: Austin, United States

Industry: General Lending & Marketplaces

Website: openlending.com

Social media: LinkedIn / Twitter

*Open Lending ultimately went public through a reverse merger. A Goodwin Technology and SPAC team served as legal counsel on the transaction.

🏙 Most Friendly Cities

Many ingredients go into creating and building a successful company, and location is one of them. On this list, you’ll find ten of the most fintech-friendly cities in Europe and North America. We compiled it based on rankings in the Findexable Global Index 2020, which takes into account many factors, including a city’s talent, financial strength, the competitive landscape, and enabling regulations.

1. San Francisco Bay

Home to nine of the ten biggest fintech companies in the United States

Boasting the best fintech ecosystem in the world, San Francisco is home to almost half of the companies listed on the Forbes Fintech 50. The city hosts several major fintech events throughout the year alongside incubators and accelerators established by leading companies such as Mastercard, Deutsche Bank, and Wells Fargo.

Biggest fintech companies: Stripe, Coinbase, SoFi

2. London

Vibrant global fintech hub with more than 20 accelerators run by major companies

London hosts numerous accelerators and incubators from companies like Barclays, Santander, and Citi. The city also benefits from a regulatory environment that supports financial innovation, including the Financial Conduct Authority’s sandbox, which has become a benchmark for innovation worldwide.

Biggest fintech companies: Wise, Greensill Capital, Starling Bank

3. New York

Known as the ‘insurtech capital of the world’ for its cluster of insurance companies

Hot on the heels of San Francisco, New York boasts a thriving fintech scene. Capital One, Mastercard, and JPMorgan Chase are among several high-profile companies with accelerators and incubators in the city, and events such as New York Fintech Week and Finovate Fall attract attendees from around the world.

Biggest fintech companies: Oscar Health, Lemonade, Petal

4. Los Angeles

Popular alternative to New York and the Bay area due to its lower cost of living

Fintech companies are increasingly gravitating to Los Angeles to avoid the high costs and hypercompetitive business environments of New York and San Francisco. Access to talent remains strong in the city, and some companies have benefited from being based close to UCLA, a further source of top talent.

Biggest fintech companies: Aspiration, Tala, Dave

5. Boston

Centre of financial innovation bolstered by strong links to higher education

Boston’s reputation as a hub for technology and innovation is growing. The city benefits from various incubators and accelerators, including TechStars, FinTech Sandbox, and the IDEA Lab. Another key advantage is its proximity to some of the country’s best universities, including MIT and Harvard.

Biggest fintech companies: Toast, Flywire, Circle

6. Berlin

Largest fintech hub in mainland Europe

After London, Berlin is widely regarded as Europe’s most significant fintech center. The city is home to several incubators and accelerators, including FinLeap, Techstars, and the Axel Springer Plug And Play Accelerator, which supported the hugely popular direct bank, N26.

Biggest fintech companies: N26, Taxfix, Penta

7. Toronto

Second-largest financial hub in North America behind New York

Home to Canada’s four largest banks and eight of the ten largest Canadian asset managers, Toronto is a hotspot for fintech companies. The area plays host to a number of large events, including the Futurist Conference – Canada’s largest blockchain conference – and Fintech Canada, part of Canada Fintech Week.

Biggest fintech companies: Wealthsimple, TouchBistro, Clearbanc

8. Chicago

Focal point for fintech activity in the Midwest

Chicago has more than 400 fintech companies operating in the city, and the availability of talent is high, reinforced by a strong presence of top business universities in the area. The city is supported by Currency, Chicago’s fintech center of excellence, plus a selection of incubators and accelerators, including Techstars.

Biggest fintech companies: Avant, M1 Finance, Enfusion

9. Paris

Growing fintech hub aided by government support for startups

In 2017, the French government pledged to make the country more startup-friendly and announced a series of labor reforms. Since then, Paris has become home to Station F, the world’s largest startup campus. Other accelerators include 104factory, and the city also hosts major events such as Paris Fintech Forum.

Biggest fintech companies: October, Shift Technology, Spendesk

10. Atlanta

Known as ‘Transaction Alley’ due to its high concentration of payment processors

A low cost of living and a substantial talent pool have boosted the growth of fintech in Atlanta. Initiatives such as the Georgia Center of Innovation for Information Technology have also helped by connecting fintech companies with the resources they need to grow and thrive.

Biggest fintech companies: Kabbage, LendingPoint, GreenSky

👉 Next chapter: Endnotes

One guide. Five categories of essential information to help you get ahead in 2021


In this guide, you’ll find expert insights, major trends, and essential data covering the fintech industry neatly divided into five categories.
  1. Introduction

    About the guide
    Read the chapter
  2. Money

    Making money in fintech
    Read the chapter
  3. Network

    Creating real connections
    Read the chapter
  4. Insights

    Staying up to date in fintech
    Read the chapter
  5. Technology

    Reinventing customer experiences
    Read the chapter
  6. Environment

    Navigating the challenges ahead
    Read the chapter
  7. Endnotes

    Help us build the community
    Read the chapter