Will the Fintech Startup Revolution Kill Traditional Banking?
PayPal. Kickstarter. Mint.com. What do these apps have in common? They were all once struggling startups that are now well-known brands - just as recognizable as Chase, LendingTree, and Morgan Stanley. These fintech companies were pioneers in disrupting the banking, lending and financial investment industries.
The Millennial generation has little patience for long lines at brick-and-mortar banks, filling out tons of paperwork, and making appointments for financial and investment advice. They’re leaving their credit and debit cards at home and utilizing Apple Pay on their iPhones. They’re splitting bar tabs and dinners by paying their friends back through Venmo. Young entrepreneurs are skipping the traditional loan process altogether and accessing start-up and seed funding through Kickstarter and GoFundMe campaigns.
As the financial technology market continues to grow into what might one day be a cashless society (with the growing interest in Bitcoin and other types of cryptocurrencies), one can’t help but wonder: Are fintechs going to kill traditional banking?
Traditional banks and financial institutions are doing everything they can to make sure that doesn’t happen. Competition from all the latest apps and new-generation financial products is causing these organizations to really focus on their customers and their changing needs. They’re going through a “why didn’t we think of this” phase and struggling to keep up and offer their customers their own versions of peer-to-peer payments, mobile apps, and more.
If the traditional financial industry really wants to survive current and future disruption, they’re going to have to start focusing on some of the niche markets that startups are currently targeting. How can they serve the crowdsourcing, crowdfunding, and niche investment markets? Several of iTechArt’s current startup clients are already introducing highly focused solutions into these markets, including…
Payfully is like a payday loan for people who rent out their properties using Airbnb (only without the exorbitant interest rates.) Payfully pays Airbnb proprietors immediately for future bookings and charges a one-time service fee of 3-11%. The more you use the service and the more positive reviews you get on Airbnb, the lower the interest rate you’ll pay.
Vestwell was created specifically for financial advisors to make it easier for them to offer the right financial advice to their clients, and to help those clients understand and embrace the overall investment process. It also reduces the risks and costs that advisors normally assume when creating a retirement plan for a large corporation.
An investment app that offers a personalized portfolio of real estate loans, AlphaFlow automatically aggregates user investments and pulls data into one comprehensive dashboard. It was the first automated portfolio service for real estate investments.
Rally Rd is a free investment app that allows you to invest in blue-chip classic collector cars and sell shares of stocks the same way you would with a traditional company. It’s the first-of-its-kind to offer this type of platform to investors of all income levels.
The common denominator shared by all of these fintech startup clients is how unique and targeted their solutions are. They’re truly the niche of the niche. Big banks and traditional financial institutions are really going to have to start looking way beyond just the big picture and focus more on individual preferences and these emerging niche markets if they want to survive.
Are you a fintech organization in the process of creating the next big thing when it comes to the financial services industry? We’ve got the experience and know-how to help you build your solution faster and more efficiently. Contact us today and let us help you change the financial industry for the better.