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Disruptive technology in FinTech is changing the finance industry for businesses as well as consumers. To ensure they’ll be part of the revolution, financial enterprises need to turn their attention to mobile platforms.
It’s a difficult time to be a bank, as more modern, mobile-centric finance companies like Venmo are innovating like never before and giving small businesses and consumers a new set of options. A report from 451 Research observed that key takeaways from last month’s Money 20/20 conference included trends such as mobile innovation and the increasing importance of developers in enterprise innovation. As a result, corporate technology decision makers should look to learn from the “finovation” of cutting-edge startups, as well as from new mobile solutions that serve the underbanked, such as Robinhood, a stock-trading app that doesn’t require any fees, and Stash Invest, an investment app that lets users invest with as a little as $5. These mobile solutions are setting a new standard for what’s possible when finance companies think outside the box and use mobile technology to provide new options for users.
Finance Startups Are Embracing Disruptive Technology
Consumers transacting with small businesses and brick-and-mortar providers are also looking at new solutions. One FinTech innovator that’s attracted serious buzz is Point, which helps homeowners to sell a percentage of their home equity for cash, allowing them to diversify their financial exposure to their home. According to Fast Company, “If Point takes off, we could have a more liquid housing market, where risk and debt are spread around, rather than so concentrated.” With backing from Andreessen Horowitz and savvy investors such as Vikram Pandit, former CEO of Citigroup, Point stands out as an original idea: Why shouldn’t homeowners be able to sell an interest in their homes, as opposed to owning 100 percent?
Another innovator that’s embracing finovation is online personal finance company SoFi, which just unveiled a new way to pay off or pay down student loan debt by rolling it into a low-interest mortgage payment, illustrating how a FinTech company that embraces the “technology” over the “finance” aspect can bring new thinking to the relatively slow-moving financial services industry.
The mobile revolution is transforming banks.
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Startups such as Chime, which recently presented at the Empire FinTech Conference in San Francisco, offer other lessons. While aiming to change an existing customer’s primary banking institution is an uphill battle, Chime illustrates that new businesses like itself shouldn’t be discounted, given the compelling fact that it towers over the big banks in terms of its Net Promoter Score (NPS), a well-known measure used in the technology industry to gauge customer loyalty and interest in promoting or advocating a solution to others.
In order to remain competitive in the marketplace, financial services companies should learn from these startup innovations, and develop their own mobile- and technology-driven strategies.
Want to learn about the latest financial services trends? The BAI Beacon Conference highlighted leading industry topics such as fraud prevention and remote payments.