What Did We Learn from the 2018 CB Insights Future of Fintech Conference?
Earlier this year, some of the biggest names in financial technology (Fintech) were gathered in New York to discuss the present conditions and those that lay ahead for the industry. Among those in attendance were CEOs and creators of start-ups, venture capitalists and regulators in Fintech. In one-on-one panels with notable finance journalists and commentators, the speakers offered their take on what they’ve learned from their experiences in the industry, and what we can expect to see in the future.
A key theme of the conference was the disruption opportunities for Fintech companies within the existing framework of the finance sector. The executives of companies like Robinhood, Wealthfront, Ripple and Marcus by Goldman Sachs shared their expertise on everything from cryptocurrency to wealth management. From their insights, we learned about what Fintech companies can bring to the table that many traditional institutions cannot: increased automation and consumer-centricity.
The increased permeation of completely automated financial tools into traditional sectors like banking and insurance were discussed at length by many of the speakers in attendance. Andy Rachleff, the creator of Wealthfront has been pioneering in the field of automated wealth management, using computerized algorithms to replace human investment advisors, and give more people access to sound investing advice.
“Computers are much better at implementing rules than people are,” says Rachleff, discussing how his company’s use of APIs is revolutionizing the venture capital industry, by using the rules-based learning capabilities of computer software to make smart trades. Rachleff also spoke about the inability of many financial institutions to incorporate many functions and services into one product, while still keeping it simple for consumer use—a lack of design. Here at Sqirl, we think he’s absolutely right.
At Sqirl, we’re on board with the many benefits of automating financial decision making, instead of leaving it in the hands of individuals for manual processing, where there’s room for human error and inefficiency. Like Wealthfront’s efforts in the venture capital industry, we’re bringing increased automation to the banking industry—specifically in how they offer credit products and evaluate applicants, through the Financial Passport (FINPASS).
In addition to its function as a container for an individual or business’ financial identity, the FINPASS also allows banks to quickly and accurately determine the risk categorization and credit worthiness of those applying for a personal or commercial loan. We also ensure the bank’s compliance with KYC/AML (Know Your Customer/Anti-Money Laundering) verification laws, all through a rules-based system which analyses the passport carrier’s financial data to evaluate their application and make sure all regulatory conditions are met before they apply for a credit product. Through automation, the FINPASS minimises the potential for human error, and maximizes efficiency, making the credit application process seamless and foolproof for banks and consumers alike.
Another key topic of discussion at the CB Insights conference was the ways in which Fintech companies are making the financial sector more consumer oriented. Democratizing financial services by making them more widely available and improving ease of use and navigation for customers are major goals that Fintech companies are striving towards, bringing revolutionary ideas to traditional financial institutions.
Harit Talwar, the Head of Digital Finance at Goldman Sachs spoke about his work with Marcus, a revolutionary alternative lending platform “start-up”, founded within the 150-year-old institution. He described the imperative value of consumer-centricity that drove Goldman Sachs to branch out from investment banking to launch a new kind of consumer credit product.
Marcus was created as a remedy to “pain points” for consumers, according to Talwar. He believes that many customers have a “broken relationship with money”: there are too many accounts, too many obligations, and a lack of control for the consumer, especially when it comes to credit. He asserts that currently the brunt of the credit burden falls on consumers, and that the framework in place in traditional finance institutions doesn’t do enough to alleviate this problem. “For those who need to borrow, the borrowing process is cumbersome, opaque,” says Talwar. “It is expensive and humiliates the customer through the process.”
We think all banks would do well to take a page out of Goldman Sachs’ book. Talwar stresses the importance of fighting customer inertia and ignorance, being proactive about the approach taken by institutions to make sure their customers are satisfied and in control when it comes to credit products. We believe that the problems Talwar describes are very real for many individuals applying for credit. That’s why we created the FINPASS.
The Financial Passport delivers a way for banks to better serve their customers, and way for consumers to be more aware about their financial status when it comes to applying for credit products. The FINPASS helps the passport carrier improve their relationship with their finances—consolidating all parts of their financial identity in one place that is easy to access and understand. Without the FINPASS, the credit application and adjudication process can be an unpredictable and stressful experience for the average applicant. The FINPASS gives the consumer more dignity and more autonomy over their own finances and helps them overcome ignorance and inertia when it comes to improving their financial track record.
Consumer centricity is at the core of what we do. But we think banks would equally benefit from incorporating FINPASS into how they issue credit products. By making the application process more transparent and easy to navigate, the FINPASS will significantly improve customer satisfaction and trust in banking institutions making customer loyalty and retention much more likely. The additional time and cost saving benefits from the efficient risk- assessment and verification capabilities of the FINPASS will be invaluable to banks currently operating on legacy systems and procedures, overall improving the credit application process for both consumers and banking institutions.
The CB Insights conference made important revelations about how Fintech companies are changing the finance sector through increased automation and a greater focus on consumers. As a Fintech start-up, Sqirl places these developments at the heart of our business model, and we look forward to users experiencing them through our product, the FINPASS.
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