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Here are the top 5 FinTech growth ideas:
1. Alternative credit scoring
Getting loans is a problem for most as their credit score comes in the way.
Many self employed people with good monthly earnings are denied loans from banks as they do not pass the loan screening set up by their outdated credit scoring agencies.
The credit rating FinTech companies can cash in and develop systems which are alternatives to the conventional rating methods.
2. Alternative insurance underwriting
If you have purchased an online insurance policy, you know that your insurance premium is decided by your age, and whether you are a smoker or a non-smoker.
But what if you are an exercise-freak? Why should you pay the same premium as your friend of the same age who is a couch-potato? Isn't he more likely to die of diabetes than I am?
FinTech companies can come up with algorithms and systems that take into account the lifestyle of an individual to determine his/her life insurance premium.
Data points can be collected from social media profiles, gym memberships and medical records. These data points can be added to the conventional data points to make it more quantifiable.
3. Asset Management
Mutual fund companies are dependent on investor’s banks for speedy registration of the One-Time-Mandate (OTM) for their monthly SIPs (systematic investment plans). This process is time consuming, especially if it is a public sector bank.
Fintech companies can cash in and solve this problem for their users. They can provide speedy and hassle-free OTM registration and cancellation services on their platforms. This will divert a huge chunk of investors from conventional asset management platforms to these smart FinTech platforms.
4. Transaction delivery
Data is the new gold. Many FinTech start-ups are offering free services just to gather information about the users.
For example, an expense management app is allowing its users to use expense management services for free. But in the process, it gathers all the data regarding the expenses of the user.
This data can then be processed and potential clients buying mutual funds, stocks, savings accounts, fixed deposits, life and health insurances and loans can be identified.
5. Peer-to-peer lending
Peer-to-peer (P2P) lending is not new to the finance world. Individuals have been borrowing money from other individuals for a very long time now.
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