Are You Ready for Fintech?
In my last post I talked about disruptors and a few of the industries that have been disrupted. You may know about how Netflix is changing the way we watch movies, that PayPal allowed anyone to easily process orders online, that Tesla has changed the automotive industry, that Uber has changed the taxicab industry, etc. But do you know what Fintech is? PayPal was one of the first disruptors in the finance industry and today there’s a term for all of them. Fintech, or financial technology, is now routinely referred to by the media and the industry at large as the the name for disruptors in the banking and financial services industries. There’s been a ton of talk about how Uber affects the taxicab industry but very little about Fintech until now. PayPal is a disruptor because they created a service that allowed anyone to process a credit card directly without costly fees and middlemen. But today’s biggest Fintech players have much grander designs. Bitcoin created a new currency. Dark Wallet is a place to keep your Bitcoins away from prying government eyes. You can buy anything with Bitcoins including people, weapons, and drugs. But beyond privacy for criminal activities, Bitcoin has also innovated exchange rates and digital currency. It’s not a credit card and it’s not cash. It’s an entirely new type of currency. Much of this innovation is happening because entrepreneurs see opportunities to solve common problems. The banking industry is a common problem. New financial service Fintechs like Wealthfront, Stripe, and Betterment are rewriting investment options with no or very low fees. There’s even a term for an automated account representative. They’re called Robo Lenders. Banks are taking notice and either investing in Fintech startups, preparing legislation to fight or limit them, or both. Like most traditional industries, the financial services industry has few early adopters in social media marketing, app development, and overall internet marketing. But one of them gets it. Fidelity Investments is a leader in the space with a heavy online presence and effective use of social media marketing within the guidelines set by the SEC, FINRA, and Dodd-Frank. It’s difficult to effectively market online within the rules and it’s also a significant investment. But you have to do it. Virtually all of your prospects and clients are on social media networks. It’s time for the financial services industry to step up, do the work and get into the game and to start you need to tell the story about your firm, your services, and your investment tools within the rules before a Fintech firm takes all your business overnight. As for investors, ask your advisor if they know what a Fintech is. If not, it might be time to Uber over to another advisor.
