Xinhua news agency, Beijing, February 17, new media special telegram: on February 7, the website of Forbes biweekly published an article by the author Alex Lazaro, entitled “the wave of innovation will provide power for the future of financial technology”
As we all know, innovation is global.
However, how the best ideas emerge in waves around the world has not been fully understood. I call the wave of new ideas innovation supply chain.
Financial technology is at the forefront of this shift. To seize the relevant opportunities, we need to understand how it will appear and prepare for the next wave of creativity.
Let’s explore three examples to see how the wave of innovation emerges.
Example 1: the rise of new banks around the world
Around 2015, a new generation of digital banks began to achieve meaningful scale and valuation in Europe. These include n26, an online financial platform called revolut, and Monzo, a mobile bank. They take an ecosystem approach, first obtaining customers through bank accounts, and then providing them with a range of products and services. In the United States, with the rise of Digital Banking in other regions, the mobile banking service provider Chaim company and other enterprises began to expand on a large scale. It has a different model based on debit exchange.
This development, in turn, has affected emerging players in other markets. The subsequent business models are a mixture of successful models in different places. In Brazil, neon, a fast-growing digital bank, has mixed debit exchange and credit dominant mode; in Mexico, a series of enterprises such as digital bank Klar (credit dominant), Albo and Cuenca (account dominant) are rising.
Nowadays, new financial enterprises all over the world use a variety of business models, some of which will be more powerful than others, and can adapt to the development of the times.
Example 2: buy now and pay later
In the same way, a new generation of “buy before pay” mode has formed a wave and expanded globally. Recently, Avram company, with a market value of more than 20 billion US dollars, was founded in the United States in 2013. Over time, other companies began to expand, such as finaccel (Singapore, 2015), afterpay (Australia, 2017), zest money (India, 2015), addi (Colombia, 2018) and Alma (France, 2018).
These patterns are also expanding in different ways. In emerging markets with low network penetration, market players are building a comprehensive model to cover physical stores, so that people can use similar products and services in physical stores.
When the market service level is low, “pay before you buy” will provide a series of solutions when expanding, covering other new banks including bank accounts.
We also see that for the same reason, non-financial digital technology enterprises are considering offering “pay before you buy” as part of their services. This is a sign of the full development of “buy before pay” in emerging start-ups. I expect that we will see a surge in the number of companies offering pay as you go services around the world. Here, various business models will expand and succeed in different ecosystems.
Example 3: payment super application software
Today, super application software constitutes an active wave of financial technology sweeping the world. Super application software was founded in China, expanding its core services through integrated payment and identity services. In this way, they can provide a range of products and services directly in the application. Wechat developed by Tencent was originally a social network, but now it is a software with a series of application functions: today, users can use all kinds of new functions convenient for life on this application software.
This initiative is being promoted all over the world, and many start-ups around the world are seeking to develop their business model in the direction of super application software. Of course, the core products in the beginning were not all chat. In Southeast Asia, companies such as go Jek and grab are moving from carpooling to tiered financial services, providing impetus for a range of other services such as meal delivery, massage and medical treatment.
It is worth noting that many global innovative products are having an impact on the original products. For example, the impact of go Jek on Uber, now Uber is entering the field of financial services and meal delivery services. This is not an isolated case, nor is it unique to fintech.
The above three examples are just a few of many. The best ideas will continue to come from all over the world and be widely replicated elsewhere.