10 Innovative Fintech Business Models

With the evolving financial needs and revolutionary ideas of investors and entrepreneurs, the requirement for innovative financial business models is escalating. In the recent past, fintech business models have managed to stand out enough to be noticeable. 

To understand fintech models, a deep understanding and knowledge are required about the types of fintech. Let’s dig a little deeper and look at the list of the 10 most innovative fintech business models.

1. Alternative credit scoring

Credit scoring is one of the major criteria for the approval of bank loans. There are immense examples where even self-employed people with stable income do not get a bank loan. This happens mostly because of a bad credit score. In these situations, different types of fintech companies are adopting a new approach. 

They are considering an alternative credit scoring approach by considering social signals and scoring amongst similar loan groups. Nova Credit is a fintech company following this new approach. This can result in better decision-making related to lending matters over time if combined with self-learning and AI algorithms.

2. Digital banking

In the era of digitalization, especially when the world is going through tough times, the need of turning into an online mode has become a necessity. Similarly, the banks have to let go of their traditional methods and cope up with the dynamic environment. Less physical offices and more digital banking for fintech businesses have become a new normal. 

Therefore, many of the banks have started offering accounts with complete digital infrastructure to individuals as well as businesses. Digital infrastructure is as similar as physical branches. In fact, it helps in saving huge costs involved in real estate and manpower. It is also preferred by many customers as the fintech innovations are beneficial.

Stats presented by KPMG – A major consulting firm!

According to the firm, the global FinTech industry is growing at an increasing rate. It will touch $158,014.3 million while growing with a whopping CAGR of 9.2% in the year 2023. Read here to understand what exactly is FinTech and its projection in 2021.

3. Digital wallets

Just as we were discussing increasing digitization and the reign of the internet, Digital wallets are yet another major aspect. Just like banking can be done in online mode then why not the payment system be done in the same manner. Digital wallets provide a safe and secure payment system as the best fintech business models. It is accessed via a password which enhances its security.

Apart from modernization, this feature also considers the convenience of the customer. Users can easily make purchases and pay for the same via online technologies. In recent years, digital wallets have evolved to the next level. Now the user can easily and conveniently combine digital wallets with their smartphones.

Fintech innovation allows users to pay directly from their smartphones without the need to carry cash or a checkbook. Paytm, Phone Pe, Free Charge, Apple Pay, Google Pay, and so on are examples of fintech business model innovations.

4. Asset management

Fintech business models companies are playing a major and significant role in asset and wealth management. These companies are promoting the investors to trade for free. This is just as same as purchasing mutual funds or stocks without paying any kind of commission fee. 

However, in return for free trade, the fintech companies require the data and information of the investors. This is done with the view of transferring the collected data two the high-frequency traders in the market. In return, these traders are capable of influencing the price of the asset. 

The same asset is then purchased by the investor at a moderately higher price than the original. This might look like an unfavorable deal; however, it is not what it seems like. The difference between the amounts saved by the way of training fees and the increase in price is still positive as well as reasonable.

5. Alternative insurance underwriting

This is similar to the model of alternative credit scoring. Let’s understand this with an example of two friends, namely, Jack and Jill. They both have the same weight, height, and physical features but different lifestyles. Jack is a teetotaler and non-smoker. On the other side, Jill drinks almost every day and is also a heavy smoker. If they both are to be given life insurance under this model, it will not be the same. 

Unlike other insurance premium calculations, Fintech products companies use an alternative insurance underwriting model. They compute insurance premiums based upon alternative data points such as lifestyle information and medical history. Carpe Data is amongst the top fintech Companies using this alternative mechanism. This can result in better decision-making related to whether or not to provide insurance if combined with self-learning and AI algorithms.

6. Neo banking

Neo banking is one of the new-age concepts in the fintech business models. It deals with the creation of digital platforms serving different purposes. It can help in managing online digital bank accounts, budgeting, saving tools, and many other services. Apart from these, different neo banks have different focuses. For example, some can specialize in automated finance, while others can assist in credit underwriting processes. 

Fintech business model has proved to be relatively efficient, fast, adaptable, straightforward, and cost-effective too. The Neo banking model is only based on digital platforms. These also tend to control the banking stacks as well as assist in providing several services by the means of the digital platform.

7. Small ticket loans

Small ticket loans are a type of bank loan which are ironically not preferred by banks and financial institutions. The lenders on the bank usually do not approve smaller ticket loans because of low margins but huge costs In return. Fintech business models companies tend to adopt an alternative approach against this. They invented a new business model involving one-click trade buttons. 

Just like e-commerce websites, these provide the option of purchasing now and making the payment later. This method is helpful as It assists in making money via transferring the data of the customer with the original manufacturers. In this model, the purchasing is made easy and prompt, however, there is no need of providing any card details and authentication right then.

8. Transaction delivery

Just like the costly management apps, the transaction delivery model works in the same manner. The information and the data of the user Carries a lot of significance in current business situations. Furthermore, managing and making the use of the collected data in a better manner can give out valuable insights relating to the ongoing trends, needs, and wants of the public at large. Fintech business models companies work in the same way. 

They create free products in order to collect the data of the client in terms of transaction delivery. Later on, the collected data are intercrossed with the rest of the group to know about the user’s interest and investment potential. These types of business models are typically based upon commission. They mostly deal with matters related to the reselling of the financial products of the third party.

9. Payment gateways

In order to enable the customers a convenient way to make the payment for the product or service, payment gateways are one of the best options. Payment getaways create a platform helping the customers pay on the merchant’s website or the platform itself. Amongst several methods of payment such as digital wallets, plastic money, and even cryptocurrencies, payment getaways have the upper hand. 

In return for the transactions on either of these available payment methods, the banks often charge a fee to handle these transactions. However, it’s not the same in this case. Fintech business model merged all such payment options in one platform, conveniently assisting the purchaser to easily make the payment.

10. Peer to peer lending

When an individual borrows money in the form of a loan from other persons, it is known as peer-to-peer or P2P lending. Similarly, types of fintech business models have evolved in the cases of businesses as well. In case a business borrows money from multiple persons, it is known as we are to business or P2B lending. 

These models help investors in a lot of senses. It assists them to get comparatively better returns than the rate offered in debt markets. The money of the investors is transferred to the pre-approved and authenticated borrowers making the whole process secure and safe. The Fintech Companies also assist in matching different borrowers with suitable lenders by the way of their platforms. 


Though Fintech is not a new innovation, this technology has only evolved in the past few years comparatively at a rapid pace. The fintech model is benefiting several companies and investors at large in the whole world. It is assisting them to get awarded financially and avail several opportunities. 

Moreover, it is earning the most important essential in any type of business which is customer trust and loyalty. This model is far from the obsolete business systems as it keeps on evolving based upon consumer trends.

We at Mobcoder can assist you to avail such blooming opportunities. As an app development company, mobcoder is known for comprehending the potential of different businesses and carving the same to their benefit. Along with the best customer-oriented services, achieving the trust and loyalty of users is Mobcoder’s first and foremost goal. We are actively engaged in helping businesses to grow and achieve wonders with fintech and related services. Our team at Mobcoder can outreach the fintech community and resolve all your queries regarding your business

We are always available to answer your queries and clear your doubts related to your business.

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