Competing with old style financial services methods, fintech (financial technology) is a novel and innovative technology. In fact, the technology is so ground breaking that it is currently taking the world by storm. We take a look at the latest developments
The birth of fintech as we know it today, coincided with the 2007 financial crisis. The resulting impact from the economic downturn was that the trust, which had been upheld by banks across the world, was ruined. So, in an environment where the morale was low, financial innovation was taking precedent, particularly amongst the millennial generation who were set to become the next cohort of consumers. Millennials – whose raison d’ être is convenience first – wanted financial services that they could connect to instantly. Fintech catapulted into the financial market in the form of mobile apps and digital platforms, bringing a welcome and fresh approach to handling money. The traditional bank may still offer conventional services such as depositing money, making payments and issuing credit but their digital counterparts are hot on their tail.
Fintech is also an innovative way for start-up companies to form relationships with investors and build their business. In the past, start-ups would look to more traditional methods such as the bank to borrow money and set up a business. But fintech not only encompasses payment platforms and digital money transfer services but also sources such as crowdfunding and peer-to-peer payments. It takes the stress out of fundraising. Entrepreneurs are, in many cases, no longer subjected to the rigmarole of credit checks or long-winded application processes. One example is crowdfunding. In 2015 alone, it was estimated that crowdfunding raised a total of $34 billion.
The fintech industry itself has grown hugely, too. In 2008, investment in fintech was a respectable $930 million but fast forward seven years and this had escalated to more than $12 billion. Another key player in the fintech community is set to be wearables. To date wearables such as the Apple watch, which allows wearers to check their bank balance and find their nearest branch, are already on the rise. So too are fitness wearables which are now able to link to the individuals medical insurance company, providing a more personalised insurance premium.
A further application of fintech is, of course, the use of blockchain, a system that uses cryptography to secure and link together permanent growing lists of records known as blocks. Blockchain is the technology that underpins digital currency, most notably Bitcoin. Although it sounds technically demanding, blockchain is just another form of database, copied to all joined computers in a network, which records transactions.
In terms of health, blockchain is highly appealing to the doctors and wider healthcare service. Why? Because there is a constant need to regulate the way healthcare data is stored and yet make it more accessible. At present, the systems in place can make it very difficult for hospitals to share their data and can even result in doctors spending less time with patients and more time typing. Blockchain has the potential to become an integral part of the healthcare data storage and access system. Every time a patient visits a doctor or the hospital, the interaction will be stored in the ledger for every healthcare provider to view. So each visit, prescription or blood test will be a transaction time-stamped by the software to form a block. Each block will contribute to a chain in chronological order. Therefore, blockchain will make the patients history easy to view by any healthcare provider and conveniently in date order.
Back in 2016 there were already 22 unicorns in fintech. In Europe, the UK has become the fintech capital, housing four companies compared to two on the rest of the continent. At the same time, medical technology and innovation has of course been affected by the worldwide financial crisis. Funding for research projects has been declining over the last two decades. As a result, researchers and innovators have been taking advantage of fintech platforms, in particular crowdfunding. There have been a wide number of medical and scientific projects that have benefited from this platform. Perhaps the beauty of using fintech to fund new ideas is that it’s not always solely focussed on valuation but geared more towards the concept and the viability of the idea, which could prove particularly beneficial in medical technology development.
Based in Finland, Invesdor was founded in 2012 and is a fintech company connecting European growth companies with worldwide investors. Operating via an online investment platform the company has so far helped to raise in excess of €38 million for over 100 different companies. One medtech company that Invesdor has helped to connect with investors is Askel Healthcare. The company has pioneered the COPLA Scaffold™, a medical device designed for cartilage repair in joints that are weight bearing such as the knee, for both animals and humans. Using Invesdor, Askel Healthcare has so far exceeded its target investment by 45 per cent.
Crowdcube is a UK-based crowdfunding platform. The success of the fintech company is reflected in its inclusion in the fintech 250 list announced by CB Insights in June 2017. Currently on the Crowdcube platform is a UK-based Care Quality Commission registered healthcare provider specialising in genetic testing. Rightangled has developed a cardiac genetic test specialising in hereditary conditions. The company’s Heart DNA test will give insights into an individual’s predisposition to high cholesterol, triglycerides and nutrient levels as well as their response to specific drugs/medications. Personalised medicine is a booming business, estimated to have a market value worth of $10 billion by the year 2022. The company are looking for investment to expand their business to develop tests for other medical conditions such as mental health and cancer.
However, raising money for a company isn’t the only way fintech can have an impact on the medtech community. In fact, in some areas fintech could revolutionise the way we view and seek healthcare. Take for example, Clover Health in the United States which is a medical insurance start-up company using data to identify whether patients are high or low risk. They use a combination of technology and data to build up a clinical profile of a patient thus providing a personalised approach to healthcare premiums. The conclusion of this kind of health filtering is hard to predict but will naturally mean that those with predisposition to illnesses won’t be able to get cover. What happens then is a problem that will have to be sorted eventually.
The Bitfury Group, the world leading blockchain technology company, announced a collaboration in August this year with Artificial Intelligence and bioinformatics company, Insilico Medicine. Together they aim to build new solutions to healthcare applications using blockchain technology. With the advantages of blockchain already set to revolutionise the way data is handled and managed in the healthcare system, the collaboration between these two companies is huge. Simultaneously, AI is also causing excitement in the world of science as its advances have far exceeded the accuracy of humans in terms of the recognition of voice and imagery. Yet its success has been much slower in the healthcare industry as deep learning systems require masses of data to learn from, even requiring tens of millions of data sets. With blockchain in use, allowing the processing and validation of large amounts of healthcare data, the two companies could provide a solution for the organisation of data and deep learning systems.
Fintech companies who are willing to invest in medtech are paving the way for healthcare to become not only better but more accessible. Financial technologies are not only focussed on making paying for healthcare easier but are also introducing other technologies such as virtual reality, analytics and robotics to enable efficient healthcare. Some of the fintech companies to watch include:
As well as partnering entrepreneurs with coaches and mentors, StartUp Health also provides a platform to over 150,000 potential investors worldwide. With four different innovation programmes, the company is globally highlighting and developing its commitment to transforming healthcare.
The idea was introduced in 2011 with the focus on supporting entrepreneurs, known as Health Transformers, to improve worldwide health and wellbeing. To date, StartUp Health has the world’s largest digital health portfolio comprising of over 180 companies spread across 17 countries. StartUp Health’s community of Health Transformers includes 30,000 innovators.
The only fully automated and online lending platform that is intended to support customer data monitoring serving small business and consumers across the world, this Santander-backed venture isn’t specifically aimed at medtech but might be well suited to help the industry. Kabbage has been set up to allow small businesses the opportunity to borrow up to £150,000 in fast and convenient way. In many cases, the average time it takes to complete an application and get access to funds is just seven minutes, although the service is no longer available in the UK.
UK based company Kainos is a fintech company which is disrupting healthcare. The company’s intention is to enable healthcare providers to operate in a more efficient manner. Kainos provides digital platforms and services which helps industry leaders work more efficiently.
While the medical technology industry is growing and has the potential to positively impact the delivery of healthcare, traditional funding and lending avenues are not always the easiest or most economical routes for small businesses. Instead, emerging financial technologies are offering alternatives to entrepreneurs often with added extras such as coaching and mentoring. Furthermore, fintech platforms such as blockchain could improve the way healthcare services record and share patient data. These financial technologies could make data highly secure but easily accessible to those who have permission to access it.
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