The Most Innovative FinTech Business Models

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This article contains information on FinTech models that help businesses innovate and improve. It includes the 1) introduction, 2) most innovative FinTech models, and the 3) role of major financial institutions in the evolution of FinTech business models.


The term FinTech is the combination of two words; finance and technology. FinTech refers to the application of technology in the world of finance. Since the advent of FinTech, the finance industry has undergone a radical change. FinTech has affected almost all aspects of financial industry including retail banking, investment banking, hedge funds etc.

The application of technology is no more limited to the daily operations of the finance industry. Rather, technology has been readily used by the finance industry to reach out to their customers more effectively. It has enabled them to operate round the clock. FinTech is a very vast model and has unlimited potential of innovation. It is due to the arrival of FinTech that mobile banking took hold in the contemporary world. Customers can easily perform their financial transactions through their mobile phones. The access that the common man has to the finance industry has been greatly facilitated by FinTech.

The FinTech industry has an immense potential for innovation. There are unlimited ways through which technology can intermingle with finance in order to offer a completely novel service. Although there are numerous business models of FinTech, some of the most innovative ones are discussed in detail below.



Various attempts have been made to make virtual currency. However, they often face crucial impediments and consequently have to be abandoned. Bitcoin turned out to be one of the most innovative and secure crypto currency or virtual currency. Due to its highly secured network, Bitcoins are widely accepted as virtual currency and can even be bought in exchange for real currency.

Bitcoin is a software that enables an online payment system. Bitcoins serve as the currency in these online transactions. The owner of Bitcoins has a private key, which indicates the ownership of Bitcoins. Moreover, Bitcoin has no central authority that possesses or regulates all the currency, and that is what makes it unique and secure. The transactions are conducted through peer-to-peer technology. Anyone can join Bitcoin and can indulge in online transactions. In addition, the payment of fees is voluntary; it is paid when the processing of the transaction has to be expedited.

Although Bitcoin got massive recognition, governments of various countries are skeptical in declaring it as a complete substitute for their real currencies. China, for example, does not openly encourage the exchange of bitcoin for its Yuan and has a heavily regulated process. United States of America, on the other hand, is a lot friendlier towards Bitcoin. Despite all the concerns related to Bitcoin, it has enormous potential to become a major part of the online payment system. Many renowned companies like Microsoft are contemplating the possibility of investing in virtual currencies. Apple has already come up with a few applications in this regard, such as, Apple Pay. Google’s Google Wallet is another hallmark in this field.

Tag Cash

Tag Cash has a very innovative FinTech business model. Tag Cash has greatly reduced the hassles of paying and receiving money online. In order to transfer money through a typical banking channel, SWIFT codes and IBAN are used to process the transaction. SWIFT codes and IBAN are the banking identities of individuals. Without these numbers, the transfer of money between banking accounts cannot take place.

Tag Cash developed a unique business model through which the financial transactions can take place via email, Facebook or phone within the social circle of a person. By using phone contacts, Facebook contacts or email addresses, Tag Cash connects the bank accounts of senders and recipients and processes the transactions accordingly. A person can conveniently transfer money to friends by Tag Cash without exchanging exhaustive numerical details about the bank accounts. In simple terms, transfer takes place by names not by numbers. Because of the sensitive nature of the business of Tag Cash, it provides bank level security to online transactions and all the financial information is closely guarded.


Oradian is a software provider that is catering to the needs of microfinance institutions. Microfinance institutions provide financial services to local individuals or businesses that find difficulty in finding financial services through traditional banking channels. The clients of microfinance institutions belong to low income groups and therefore, microfinance institutions provide specialized services. Oradian develops core systems pertaining to microfinance. Their system helps the microfinance institutions to manage their clients more efficiently. Furthermore, Oradian provides softwares that facilitate the day-to-day operations of the microfinance institutions. The areas in which the Oradian system can help a microfinance institution are:

  • Deposit tracking
  • Security
  • Loan Portfolio Management
  • Administration
  • Accounting

FinTech’s Oradian business model relies primarily on creating a niche in the microfinance industry. As the income inequality in the world is rising to exceptional levels, the world needs to encourage small businesses. The development of microfinance institutions plays a crucial role in this regard. The developing countries are strongly encouraging microfinance institutions. By dispersing credit to small businesses, the economy revives incredibly. With this unique FinTech business model, Oradian is targeting a market that has huge potential for growth. Oradian is making the microfinance institutions high tech, which will greatly enhance their productivity.


Satago completely automates the accounts receivables department of an organization. By being registered, Satago connects to the accounting system of the business and manages the accounts receivables accordingly. Satago keeps track of accounts receivables and enables to place reminders on debtors from whom payment is due. Furthermore, it can also track down the inventory. Satago is able to address every aspect of accounts receivables and that is what makes it a smart choice.

By connecting to the accounting software, Satago gets the access to the sales ledger. From there it is able to track payments, place reminders and even post the payment demand letters to clients from whom payment is due. Satago goes an extra mile by analyzing the payment frequency of clients. It then classifies the clients accordingly in order to update the business owners about the payment habits of their customers. Due to Satago, businesses do not have to invest hefty resources in managing their accounts receivables; Satago does the whole work incredibly.

Simple Tax

Simple Tax is software that makes the tax filing process easier. The software is currently serving the Canadian market. It automatically updates to the most recent regulations in the tax system. Furthermore, online support for new rules and regulations concerning taxation is also readily available. In addition, the interface of simple tax is very user friendly, which makes the tax filing process efficient.

People always find tax filing systems cumbersome. They often do not have access to the most up to date information regarding tax filings and are also scared that they will end up in filing wrong tax records. Simple tax is an innovative product. By identifying the problems that people face in filing taxes, the software addresses these concerns and that is what makes it extremely practical.


Transferwise is a very innovative yet very simple FinTech business model. Transferwise enables people to transfer money internationally at substantially lower costs. Through normal credit card, people transfer their money to Transferwise in their respective local currencies. Transferwise converts it into the foreign currency of where the money has to be transferred. It transfers the money and informs the people through email. The most innovative part of the business model of Transferwise is that it does not actually transfer the money through international borders. Rather, it has clients all over the world, and it matches their transfers with other people transferring money in the opposite direction. By matching these opposite transfers, Trasferwise does international money transfers through mere local transfers. Therefore, it costs around 90% less than the local banking channels.


Holvi is yet another innovative FinTech business model. The company belongs to Finland; however it is licensed to work in all the European countries. Holvi is providing all the important finance related services to a business at one stop. It allows people to sell their products as well. The people can perform the entire transaction of buying and selling products at Holvi, without the need of an intermediary. It further facilitates its users to manage all their finances. It has high security. Holvi is a great place for small business owners like bloggers, personal trainers, part-time gardeners, consultants etc. For entrepreneurs in Europe, Holvi is a one-stop shop where they can sell their products as well as manage their finances.


Access to financial information is very crucial for the investors. TRDATA provides timely data related to market. It enables investors to carry out the investments online. TRDATA has tools in that help to facilitate negotiations and to strike deals among investors. Moreover, it is very secure. TRDATA is generating revenue primarily through providing access to most up to date financial information. It entails information related to bonds, foreign exchange rates, commodities etc. It is ideal for use by the managers related to portfolio, risk, traders and strategic management.


FinTech industry is very dynamic in nature and has been subject to constant innovation. FinTech industry was able to take the world by storm because it gives the opportunity to small-scale tech savvy entrepreneurs to provide innovative financial services to the masses. The advent of information technology and globalization has greatly facilitated the growth of FinTech. Innovative FinTech business models were able to become a success because they could reach out to a humungous global market. However, the growth in FinTech industry has not spurred up only because of small-scale entrepreneurs; the role of major financial industries cannot be neglected in this regard.

Innovation always comes up with a risk of failure. The entrepreneurs work at small-scale in the FinTech industry. They have the capacity to bear the risk of failure in a better way as compared to the major financial institutions. Financial institutions work entirely on public trust. They are highly regulated by the financial authorities in order to add up to their reliability. These financial institutions are answerable to the public for all their operations and therefore, they have to closely guard their investment choices. Moreover, since the global financial crisis of 2007-2008, each move of the financial institutions is subject to high scrutiny. Probably, that is the reason why financial institutions are very particular about their investments in the FinTech industry. They cannot afford the luxury of frequently failing on FinTech ventures. While, on the other hand, entrepreneurs in the FinTech industry have the benefit of venturing into diverse fields because they can afford to take the risks involved in innovation. There are primarily two reasons for it:

  1. FinTech entrepreneurs do not have a huge reputation to protect. In case of a failing investment venture, FinTech entrepreneurs can always come back with some other project. Like major financial institutions, they are not put to strict scrutiny
  2. The investment in FinTech projects is considerably lower at the initial stages of the project. Therefore, if the project failed, they will be answerable only to the financers of the project and not to the entire public.

Owing to these reasons, the FinTech entrepreneurs can go wild in their FinTech projects, which often results in innovative FinTech services.

Despite all these benefits to the entrepreneurs of the FinTech industry, they cannot work in isolation for long. As the entrepreneurs are serving the same market, which other financial institutions serve, they will not be able to bear the cutthroat competition for long. Furthermore, the financial institutions have been in the finance industry for a long time. They are simply not ready to lose their customers. In order to stay in the market, they have the sufficient resources to go extra lengths to beat the competitions. When the financial institutions see online payment systems taking toll on their customers, they take the lead and introduce online banking. In order to stay abreast in the competition, financial institutions are collaborating with FinTech projects that have a promising future. The entrepreneurs find this partnership advantageous because it provides access to huge resources of financial institutions in terms of their finance and their customers. Due to access to these resources, FinTech entrepreneurs find it profitable to team up with other financial institutions. Thus, large financial institutions play a crucial role in the success of innovative FinTech business models.

The potential of innovation is immense in the FinTech industry. There are innumerable ways through which technology can innovatively blend with the financial sector. The business models of FinTech industry are helping tremendously towards technological inclusion. Through innovative FinTech business models like that of Holvi and Transferwise, financial services are able to serve the masses at considerably lower costs. FinTech is constantly challenging old systems of the financial industry and is even enabling the traditional financial institutions to become a part of FinTech. The innovation in FinTech is not only facilitating large businesses, but are also tremendously helping small businesses as well. It is true that innovations brought by the FinTech industry can hardly go unnoticed.

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