THE TOP 4 FINTECH COMPANIES TO WATCH IN THE CAPITAL MARKETS
This time, we prepared to introduce the most demanding and successful top 4 capital market fintechs. First and foremost, let me explain what a “capital market” is. You may know the “money market”, which trades one-year-duration debt instruments; whereas, “capital market” is for more than one year term.
1.Trumid
(Location: New York, USA)
Website: Trumid - Product
About
Trumid is a fintech company, created a capital market platform that makes debt instrument trade faster and more efficient. Their bond trading platform is called Market Center 2.0. Trumid collaborates with 539 buyer/seller companies, 1942 active traders and 85% of them have traded successfully.
Fintech model
Trumid Market Center platform can find and connect traders by using IOI-based (Indication of Interest) protocol. This protocol shows the investor’s interest to buy a bond; however, this non-binding suggestion is not an official decision. In other words, the investor doesn’t take responsibility for the purchase as a legal matter. Therefore, the protocol helps investors to show their interest and connect them with issuers. If they “match”, they will be able to do the “Click-to-Trade”, just pressing a button to trade.
Key to success
According to the “Forbes FINTECH 50”, it says that “This is a great advantage that Trumid’s platform allows trading participants to propose the price anonymously and consider favorable bid from investors.”
Moreover, the company introduced Trubot to drive anonymous and attributed negotiations. Also, Trubot can transform details into natural language processing, which is fantastic.
They offer you to download the “demo” version of Trade Center 2.0 free.
2. Mercatus
(Location: Silicon Valley, San Francisco, USA)
Website: Mercatus | Investment Data Management Platform for Private Markets (gomercatus.com)
About
Mercatus is a private platform for investment data management. Mercatus enables managers and asset owners of investment funds to manage complicated investment data analysis.
Fintech model
The company uses a cloud-based operating system, meaning it manages the processes of virtual machines, virtual servers and virtual infrastructure, as well as the back-end hardware and software resources.
Key to success
Mercatus is ahead of other industry leaders namely, Points Solutions, Excel and In-House Solutions, by offering customers a solution that perfectly combines the flexibility and centrality of investment data management.
3. Halo Investing
(Location: Chicago, Illinois, USA)
Website: Halo Investing - Structured Note Platform
About
Halo Investing is a company that initiated a securities trading platform- “Structural Note”. “Structural note” refers to a security in which other derivative financial instruments are attached to increase the return and reduce the risk. In simple terms, for example, you were to buy a bond at par and yield 7% per annum. But on top of that, it means if the bond market interest rate changes to higher than 7% in the future (in which case your risk will rise by the same level), you can return the bond you bought and give up the risk. We call this type of attached financial agreement “derivative”. In general, a “structured note” is a “protective” security that protects the investor from adverse market conditions.
Fintech Model
They operate their platform by using the “Capital Market Business Model”.
Key to success
In most structured securities markets, trading is done on a call-around basis, and the trading process slows down, because there is very weak bid competition. "Call-around" refers to the method of calling and speaking individually to connect investors and issuers.
In addition, most platforms fail to provide investors with sufficiently open, detailed, and transparent information about the investments they intend to make and additional protective products.
In the past, structured notes were only available for wealthy investors in the traditional market.
4. Wealth Access
(Location: Nashville, Tennessee, USA)
Website: Wealth Access: Personal Financial Management
About
Wealth Access, Inc. is a wealth management fintech company offering reporting solutions for high net worth investors and financial advisors.
Fintech Model
Their cloud-based platform for diagnostics or analysis is called Intelligent Aggregation. The site aggregates information from over 20,000 financial services companies. Thus, we can assist high net worth investors in all kinds of difficult situations, including investment decisions, tax planning, insurance, and other complex issues.
Key to success
A financial advisor can prepare and present a consolidated balance sheet to their client or investor so that they can see their total net worth directly. It also allows the investor to directly deposit his credit card, bank account, etc. other assets. Besides, since the client has the access to change the structure and organization of the field according to his needs and interest, the process of managing and organizing the investor's assets has been facilitated in a more personalized way. When they surveyed their current clients, each client who used the Wealth Access's Aggregation platform was able to increase their net income by an average of $2,000.
Sources:
Official websites and LinkedIn pages
Fintech Landscape in 2020 (with Infographic) | Toptal
The perfect storm of technology and capital markets: The modern history of FinTech (assets.kpmg)
Indication of Interest (IOI) Definition (investopedia.com)
145+ Tech Startups Focused On Transforming Capital Markets In One Market Map (cbinsights.com)
Halo Investing Company Profile: Valuation & Investors | PitchBook
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