VB Guest Post | Eric M. Jackson and Christopher Grey, CapLinked | Aug 4, 2015

Fintech is hotter than ever with investment tripling to $12.21 billion in the past year, according to Accenture’s 2015 report. Recent Jobs Act legislation is fueling this trend, with deregulation of crowdfunding leading the surge of investments from retail and institutional participants.

Lending Club, for example, recorded the biggest tech IPO of 2014, raising some $865 million on the New York Stock Exchange at a valuation approaching $9 billion. According to projections from Fundable, a crowdfunding startup, global crowdfunding initiatives will raise $500 billion annually by 2020.

Crowdfunding, robo advisors, and digital currencies have captured the most attention from those disillusioned by Wall Street. Away from the headlines, a new crop of financial technologies is exploding.

Fintech Trends for 2015: Investing Services, Anti-Social Trading, and Digital Crowdfunding

The fintech 2.0 age represents a leap towards faster, leaner, more tech-savvy platforms built for the finance industry. The fintech 2.0 economy will emerge out of the following trends: open architecture, smart due diligence, and the proliferation of complex investment vehicles. Let’s explore this new wave of fintech innovation.

Open Architecture

The Accenture report highlights the growing popularity of open-source innovation within financial institutions. Specifically, financial firms are channeling the power of the crowd and making their application programming interfaces (APIs) accessible to outside developers.
Goldman Sachs is at the forefront of this push in the United States. The report notes the investment bank’s placement of its proprietary source code on GitHub, a collaborative code-writing platform for developers and programmers.

By embracing the sharing economy, Goldman could benefit from disruptive innovation more rapidly and cost effectively than if it had constrained R&D within its internal, closed IT system. In Europe, Fidor Bank enables outside developers to revise code, building new services out of the bank’s existing platform. And here in the U.S., an innovative new business bank called Seed allows small businesses to customize their web and mobile user experience to suit their specific banking needs.

Smart Due Diligence

We envision a future where M&A deals and other complex workflow moves at light speed, with organizations exhausting less capital and human talent on processes that can be automated. Significant advances in machine learning, driven by pattern recognizing algorithms and predictive coding, allow people to collaborate with technology to find key data points more efficiently. This collaboration has already started to transform discovery in the legal sector. Ever since 2012, when federal Judge Andrew J. Peck ruled in favor of technology-assisted review for e-discovery, smart due diligence has become a hot topic.

8 emerging sectors in fintech that global investors should explore now

This shift in the legal and regulatory landscape has paved the way for innovative companies like Kira Diligence Engine, which uses machine learning to automate the mining and review of data across contracts in the diligence stage. We think that smart diligence solutions will become increasingly valuable in the robust M&A market of 2015. Texts, social media posts, and other mobile device and cloud-stored data will amplify the volume of discoverable information, making automation all the more crucial.

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Early bird tickets just launched!  Crowdfunding fintech Conference

Vancouver Event (Sep 29, 2015):  VanFUNDING 2015 (more info)

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country.  NCFA Canada provides education, research, leadership, support and networking opportunities to over 1100+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  Learn more About Us or visit ncfacanada.org.