We are in the early stages of the financial sector’s version of the Industrial Revolution.
The financial services industry is changing. Incumbent companies like Wells Fargo, Fidelity, and even your local bank are all seeing disruptive start-ups crowd their space. But what does this mean for you? Well, it means more choices and lower prices are on their way.
Fintech refers to these ‘financial technology’ firms who leverage the Internet and their expertise of other technologies in order to provide financial services to the masses. Many of them are based in Silicon Valley or New York City. Examples that you may be familiar with are Square, Venmo, or Robinhood (no, not the guy who shoots arrows). One thing that most fintech companies have in common is their motive: they want to disrupt the norm by being transparent, cheap, and easy for their customers. Since financial services encompasses a multitude of things, there are a lot of niches for fintechs to choose from. Some of them help small businesses set up retirement plans for their employees, while others provide advice and automation for individual investors.
Now I don’t know about you, but I often find myself in a predicament when it comes to personal investments. I always care about earning a solid return, but my attentiveness ebbs and flows when life gets busy, and my emotions can get the best of my decision-making process (darn you, Apple). If any of that resonates with you, there may be a fintech that can help. Many of them utilize algorithms that automatically rebalance your portfolio for maximum return potential while minimizing what you pay in taxes. Their websites and apps are intuitive and fun to use too! If you’re interested, click on some of these links to explore.