If forced to pick but one industry that serves as a catalyst for growth and change in the banking space, my answer is “FinTech.” As NJ-based ConnectOne Bank’s CEO, Frank Sorrentino, opined late last week, “financial institutions today operate in a constant state of reevaluation… at the same time, low interest rates and a brand new tech-driven consumer landscape have further contributed to the paradigm shift we’re experiencing in banking.” After I shared “Three FinTech Companies I’m Keen On,” I was asked who else I am taking note of in the financial technology sector; hence today’s spotlight on three additional companies.
The fabric of the banking industry continues to evolve as new technology players emerge in our marketplace. With banks of all sizes continuing to implement innovative technologies to grow their organizations, companies like Yodlee have emerged “at the heart of a new digital financial ecosystem.” The NASDAQ-listed company counts 9 of the 15 largest U.S. banks as customers along with “hundreds of Internet services companies.” These companies subscribe to the Yodlee platform to power personalized financial apps and services for millions of consumers. With thousands of data sources and a unique, cloud platform, Yodlee aspires to transform “the distribution of financial services.” It also looks to redefine customer engagement with products like its personal financial management (PFM) service, which pulls together all of a customer’s financial information from multiple accounts.
Now, technology in the financial world encompasses a broad spectrum of tools. For most officers and directors, I have found conversations about what’s happening in this space naturally incites interest in mobile banking. So let me turn my focus to Malauzai, a company I first learned of while talking with Jay Sidhu (*Jay is the former CEO of Sovereign where he grew the organization from an IPO value of $12 million to the 17th largest banking institution in the US… he is now CEO of the very successful Customer’s Bank). This past spring, he talked about the benefits of working with the company that was formed in 2009 to “participate in the mobile banking revolution.” Malauzai works with about 320 community banks and credit unions across the country, providing the tools needed to connect to a customer through smartphone applications. Specifically, the company builds mobile banking “SmartApps” that run across mobile platforms (e.g. Apple and Android) and several types of devices from smart phones to tablets.
Certainly, many FinTech companies have a laser-like focus on individual customer needs. Case-in-point, Openfolio, a startup that “brings the principles and power of social networks – openness, connectivity, collective intelligence – to the world of personal investing” (h/t to Brooks and Gareth at FinTech Collective for sharing their story). Openfolio’s premise: in our sharing economy, people will divulge investing ideas and “portfolios, in percentage terms, within their networks.” Accordingly, Openfolio provides a place where investors share insights and ideas, and watch how others put them into action. As they say, “we all learn from each other’s successes (and mistakes).” As reported in TechCrunch, the company doesn’t reveal dollar amounts folks have invested, preferring to reveal how much weight different categories have in an investor’s portfolio to reveal information about markets.
Personally, it is very interesting to watch companies such as these spur transformation. If you are game to share your thoughts on FinTechs worth watching, feel free to comment below about those companies and offerings you find compelling.