Having trouble remembering what your online life was like in 2006? Here’s a benchmark: Facebook, Twitter, and the iPhone are all more than 10 years’ old.
Sure, the word fintech has been all the rage the past couple of years, but it’s not a good sign when the word “tech” is wrenched into a moniker to explain what the companies involved actually do.
We don’t refer to Uber as ‘taxi tech’, just like we don’t think of Airbnb as ‘hotel tech’. It just works. It’s how we live.
I’m not sure who coined the term fintech, but I can confidently say it’s been popularised by incumbents who look quizzically at tech companies as a paddock for propeller heads.
Recently, one banker asked me how things were going at the ‘two-dollar shop’.
In reality, we in the fintech industry are busy testing ideas and innovative technologies that make everyday life better for those who depend on the dusty realm of financial services.
Some of us are outsiders set on challenging the banks head-on, while others come from the industry and seek to improve it.
A recent report by PwC titled Sink or Swim: Why wealth management can’t afford to miss the digital wave highlighted just how much catching up financial services companies have to do on the tech front.
The study found 69 per cent of high-net-worth individuals use mobile/online banking, with 40 per cent using self-directed and execution-only investment services such as a low-cost online broker.
Of those with more than $10 million, only 22 per cent are “very satisfied” with their existing service.
That means wealthy people are dissatisfied and their assets are portable. That must terrify those reliant on vertical integration.
This bodes ill for professionals on the wrong side of technology. Every day, clients of financial advisers, accountants, and fund managers are finding ways to access their data and take matters into their own hands – for better or worse.
Sure, there’s dissatisfaction with the banking industry, but technology (particularly mobile) is allowing us to do this in all other facets of life. There’s no stopping this trend.
This is not a surprise to us. While we see the best financial professionals seeking services like Sharesight and our family of connected products, we also talk to those who just don’t get it.
Some fintech companies are doing some really cool stuff with technology — blockchain or the way our developers have applied new JavaScript frameworks to Sharesight, for example.
But the truth is, the most successful fintech companies are the ones redefining how people are organising themselves around financial products. And the financial professionals who understand this have a head start.
We’ve recently started profiling our financial adviser clients and one common thread is none rely on an out-of-the-box tech solution.
Instead, they let their clients dictate which apps and services they use – not just for product selection, but access too.
The banks who persist in building or dictating the tech platforms their wealth management teams use may not find their client relationships totally severed.
Instead, their assets under management won’t grow, and they won’t know who else is giving their clients advice.
Doug Morris is the general manager of Sharesight, an online trading portfolio management software provider.
