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According to Dealroom, fintech startups raised a total of 125 billion dollars in VC funding globally during 2021, which is almost three times more than the year prior. Early-stage funding is also on the rise, especially in Europe and emerging markets. In 2021, almost 1.8k early-stage fintech rounds were completed.
What we’re seeing now is an Open Finance Movement, where consumers are gaining ownership and control over their money, financial data, and investments. What does this mean for your bank, you may ask? The way we see it, banks that understand these changes and are fast to implement innovative solutions for their consumers will have a competitive edge over the ones that don’t. One example of the magnitude of this movement is the recent news that JP Morgan is now adding 12 billion dollars to their technology budget, to add new products and services that will take them into the future.
More banks are now realizing the growing importance of boosting their innovation in the WealthTech sector – a unification of wealth, savings and investments, and technology. This, for example, includes social trading platforms, robo-advising, and digital wallets. In the post-pandemic world where the amount of retail investors have skyrocketed, there’s a lot to gain. In Europe alone, the number of retail investors has doubled since the beginning of last year. One of the many opportunities that WealthTech holds is social trading platforms – open and accessible communities for traders, where users can exchange information and inspiration.
In times of uncertainty and fluctuating markets, we’re seeing an even greater need for proactive communication from banks and brokers. How do you inform your customers about important events relating to their portfolio? If you’re asking me, the bank should know what's important for their customers – and make them aware of it instantly. This is something we've been working on a lot recently, and it turns out it’s a really good thing – for example when Netflix recently dropped 20 percent in just a few hours. Since I own stocks in Netflix, I instantly received a notification about it, and it made me want to share community insights about what people are saying and doing about Netflix right now.
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Fabian Grapengiesser, CEO and Co-Founder of StockRepublic