Exclusive: ‘The taxonomy of Fintech’ – Simon Hardie, Findexable in “The Fintech Magazine”

Findexable’s Global Fintech Index is a new way to identify where the industry’s hot and where it’s not. We asked Founder Simon Hardie what makes these rankings different. There are many fintech indices out there, and, while many countries and cities aspire to feature close to the top of them, there is a dollop of scepticism about what it really means to be included in the rankings.

The criteria by which they are calculated have never been entirely clear and trying to make sense of them is no easy task. But that’s exactly what Simon Hardie, the founder of Findexable, has done by launching the first interactive Global Fintech Index to rank countries and cities by not one, but multiple indices to determine the healthiest ecosystems.

We chatted to him about what it is he hopes to achieve with Findexable, what it offers the industry, and whether it contains some genuine revelations.

THE FINTECH MAGAZINE: How would you describe Findexable’s Global Fintech Index and the genesis of the idea?

SIMON HARDIE: Our mission is to rank and score fintech innovation, at the city and country level, and then to build out, on top of that, a large global catalogue of fintech companies.

We launched some rankings at the end of last year, which was basically the first time anybody had ranked any and all fintech countries/cities where there’s any degree of fintech activity. We used that to raise awareness about what we’re doing, and then built our digital platform, which is a map of fintech companies, that you can zoom in on to see the companies that are based in that location. If you’re a fintech, an association or an accelerator, you can also add yourself to the map.

What we’re starting to do is categorise, so that you can look at specific cities or countries and the types of fintech activity that’s going on, such as payments, banking, blockchain, crypto and so on. It’s a big task. There’s a world out there that is not being mapped or tracked, and there’s a lot of exciting innovation happening. We wanted to put that on a map, and make these companies more visible.

TFM: How do you foresee the site working when it comes to mapping and cataloguing fintech companies?

SH: Much like LinkedIn. We want players to come to us and see the opportunity to add themselves to the map at no cost. My guess is that we will end up with at least 10,000 companies, maybe well beyond that. We also have a network of close to 50 association and ecosystem partners worldwide that we’re working with directly, on a day-to-day basis, to get more of their local fintech companies to look at the map and add themselves to it.

TFM: What have been some of the surprises in terms of the locations and types of companies out there?

SH: It’s just the sheer diversity of fintech activity across the world that’s surprising. We have literally had companies from Albania to Zimbabwe adding themselves to the map.

One of our key mission statements is to not just make it easier, make it more transparent – democratise the visibility of fintech innovation globally – but also to be an advocate for progressive financial services.My belief is that fintech was created to solve difficult problems, global problems, and the index can play a role in making sure that happens. It’s not just about niche providers taking advantage of fintech, it’s really about enabling entrepreneurship.

Clearly, fintech, as an industry, has some work to do, to make fintech firms more diverse, to encourage more women to found fintech companies, to be more ethnically mixed, but it is our view that we can play a role in advocating that, and actually effecting some change in that direction.

TFM: What do you anticipate for the future, in terms of uncovering opportunities for fintechs?

SH: We’re just starting to work with the Africa Fintech Network, and we’ll be kicking off an Africa-wide fintech census programme to track innovations across
the continent, from Northern Africa, as well as Sub-Saharan. So, I would anticipate that we will soon start to see where these new pockets are emerging. Rwanda, for example, is something of a tech hub. Its fintech story has been less well told.

There’s also a bit of a hole when it comes to Latin America. We’re engaging with new partners in that region, too. Mexico is the first country in the world to institute a Fintech Law, to promote and advocate more fintech innovation, and, as a result, there’s an emerging open banking cluster. We’re looking to track things like that, as rules and focusses change.

I suspect, coming out of the pandemic, different governments will take very different steps, when it comes to the promotion or advocating of digital finance, as a means to allow people to carry on with their daily lives.

TFM: How do you intend to keep up with the speed with which businesses can change in the world of fintech?

SH: The problem with fintech data is that there’s almost no comparability. What data there is, is kept behind expensive paywalls, and it’s quite often an analyst’s view. That’s partly why we want to offer a free service where you can add yourselves to the map.

We will optimise that consistently, over time, with more features. Companies will own their records and they will improve the quality of the information that’s held on there. Obviously, our team will validate the stuff that’s important, in terms of  ‘is this a fintech company, is this a company that exists, and is it trading?‘, and so on.   We believe that having a web presence as a fintech firm is key to a company’s success, so we are also algorithmically ranking fintech companies according to the weight of their website, much like a Google search ranking.

Fintech is a global industry, but there are no globally agreed standards or definitions of what is and what is not fintech, and,  certainly, when it comes to classification within it, it’s very blurred.

We currently have 14 or 15 different categories, but we will be building that out. We will keep it straightforward, so that it’s easy for the user. We are also forming a data governance council, which is a global group of academics, institutions, investors and experts on fintech. We’ll be working with them to improve and optimise the classification system, the taxonomy of fintech, starting with a very precise definition of what constitutes a fintech company. We see doing that, in parallel with marketplace representatives coming to us, as the way to create the most accurate picture, and, ultimately, a benchmark of fintech in different countries.

It doesn’t need to be absolutely perfect, but it needs to be relevant, useful and usable.

This article was published in The Fintech Magazine: Issue #17, Page 89-90

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Author: Lauren Towner