Fintech is a combination of the words financial and technology. In the past, the term referred to the technology that financial institutions used to conduct business. However, today the term is applied to a multitude of technology that relates to the financial sector. Machine learning and big data have contributed to the rise in popularity of fintech. Both financial institutions and individuals will benefit from the power of fintech. This post looks at five fintech companies that have the potential to change the financial landscape.
SoFi takes its name from social finance. Its original mission was to help recent college graduates refinance their student loans, but today it also offers mortgages and personal loans. The company currently offers an Unemployment Protection program to members who lose their jobs. SoFi has also developed a wealth management program that allows users to invest with just $500.
Billguard helps users track their monthly spending via an app on their phone. It also monitors your credit report for identity theft and sends you notifications about data breaches. Most of the app’s services are free, but users also have the option of paying a monthly fee to access even more services like live support, theft insurance, and black market surveillance—a feature that scans the web to see if your private data is exposed somewhere.
Square has made it much easier for businesses to accept credit and debit cards. The company was founded by Jack Dorsey, the founder of Twitter. Small businesses that may have only accepted cash in the past can now accept credit cards. It’s highly likely that you’ve visited a business that utilizes Square products.
Wealthfront is a “robo-advisor.” A robo-adviser is just what it sounds like: it’s a wealth management tool that offers portfolio advice without the involvement of humans. Instead, it uses algorithms to offer advice. Wealthfront is one of the most popular robo-advisers. Investors find Wealthfront attractive because it doesn’t charge the usual 3% fee to manage users’ money.
Robinhood gives customers the ability to trade stocks and pay no fees. The first question people usually ask is “How does the company make money?” In September Robinhood introduced Robinhood Gold which costs $10 a month. It gives users the ability to instantly deposit their money, and it allows users to borrow money that they can trade with.
Wealth Managers and Fintech
While the above fintech companies are geared toward individuals and businesses, wealth managers also stand to benefit from the new technology. For example, wealth managers that adopt mobile apps will make their customers happy since the popularity of apps isn’t going away. Wealth managers can also use data analytic tools to conduct their research. This type of technology has the potential to save wealth managers both time and money.