It seems not a day goes by where I’m not coming across a story about Venmo. Maybe I should thank holiday shoppers; more specifically, friends or family member that go in on a joint present for someone. Rather than accept an IOU, the social payments company has made story titles like “Cash is For Losers!” en vogue by allowing its users to settle debts without cash or check. So the company’s success had me exploring the world of FinTech and other companies worth taking a look at. Here are three I’m keen on along with a short overview on what they offer.
Wealthfront is an automated investment service with over $1 billion in client assets. The Palo Alto-based company manages a “diversified, continually rebalanced portfolio of index funds” on behalf of its clients.” Their proposition: “Wealthfront takes the guesswork out of sound, long-term investing through effortless automation. Wealthfront manages a personalized online investment account for you that is fully diversified and periodically rebalanced – accessible anytime and anywhere from your desktop, tablet or phone.” For an individual, their service premise is quite attractive, given “the consistent and overwhelming research that proves index funds significantly outperform an actively managed portfolio.”
I wrote about Kabbage last year (A Pop Quiz on the Future of Banking) as a platform for online merchants to borrow working capital. Per Time’s Business & Money site, “Kabbage financing resembles a line of credit in that customers only pay for what they use, but it isn’t a loan and doesn’t require merchants to use their personal assets as collateral. Rather, as with a business factor, a Kabbage financing is structured as a cash advance against future sales.”
Dwolla is a payment network that allows any business or person to send, request and accept money. As they say, they are “not like those other big payment companies that rely on plastic cards and charge hefty fees.” Instead, the company built its own network that “securely connects to your bank account and allows you to move money for just $0.25 per transaction, or free for transactions $10 or less.”
I’m on record with my feelings that bank leaders have real and immediate opportunities to expand what banking means to individual and business customers by offering services that go beyond a traditional business model. These three companies provide alternatives to traditional lines of business, and are just a few of the many that are working to create a “newer” normal for individuals and businesses. If you are interested to share your thoughts on FinTechs worth watching, feel free to comment below about those companies you find compelling.