Presented by Envestnet | Yodlee
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The past year and a half dramatically impacted the acceleration of fintech solutions, both for consumers and for fintech companies. The landscape for financial services delivery has changed completely, says Seb Taveau, vice president of developer experience at Envestnet | Yodlee, from the need to go digital as the default, to increased consumer concern about finances in an unpredictable world.
“Fintech companies need to deliver actionable items with a highly customized experience,” Taveau says. “And with risk models changing, from the gig economy to rising unemployment and resignations, financial institutions and fintech startups have to revisit how they do business.”
New opportunities in a new fintech ecosystem
The past five years have seen massive VC investment into the fintech ecosystem, supercharging the startups like Stripe that are dominating the fintech world today. The most successful companies aren’t just creating apps anymore — they’re developing platforms and integrated solutions for a growing ecosystem. Fintech has sprouted insuretech, wealthtech, proptech, and more, that no longer require a bank partner to do business. As well, regulation has finally adapted to the world of digital finance that was unknown 20 years ago, providing a lot more flexibility, he explains.
“Open finance, open banking, and open APIs mean that as an entrepreneur in fintech now, you don’t have to be an expert in financial regulations in every state, because the fintech ecosystem is providing these foundational elements,” Taveau says. “Now you can focus on something else other than being an expert in the basics of employment tax or mortgage loan regulations, and just build a solution.”
And fintech companies need to think about finance 360 — moving beyond payments, or solutions built around bank accounts, checking accounts, and credit cards. Consumers want the big picture view of their financial situation, from their 401k and IRA to the value of their real estate, what kind of equity they have, and the best-value insurance whether that’s health, automotive, or home.
“All these questions involve some kind of fiduciary decision, and that’s where you have to look,” Taveau says. “All these elements that may not seem connected to fintech or finance, at the end of the day, there’s a movement of value behind it. Consumers want a place that will give them that information, and they want it at speed.”
With newly open access to a broad array of data, from industry information to consumer trends and private, personal information, the tricky part for a fintech entrepreneur is figuring out what’s relevant to their users — and using it correctly. The big challenge here is navigating compliance issues in every region you’re operating. It’s important to find the right partner not just for the immediate need but also for the long run and at scale, if you want to continue to grow.
Fintech in a box is giving developers an edge
Along with financial standards and regulations finally catching up with the real world, cloud-based architecture is creating a drastic improvement in the accessibility and control of data. Open finance, open banking, and open APIs are also creating the opportunity for companies to create a totally integrated platform — in other words, offering fintech in a box.
Having the technology you need under the hood lets entrepreneurs refocus on the customer experience, or what they’re experts at, versus the finance side Taveau explains. And because it’s powered by APIs, the technology will always be up to date.
“Today it’s not really about innovation — it’s about integration,” he says. “For the fintech industry, it’s not going to be the greatest innovation or the greatest invention. It’s going to be the greatest integration that wins it all.”
So the challenge for new entrants in the field is manifold, from integrating information and APIs effectively on one side, to creating new business models and new ways to analyze financial information to create the extremely custom experience consumers expect — and in the middle, the full digital bonanza.
“That’s why you see all these neobanks doing very well during the pandemic, because they can understand each side,” Taveau says. ” They understand the digital aspect of delivering a customized experience. They understand how to use APIs from third-party partners. They’re not dragged down by old business models. They’re creating new business models.”
To learn more about the opportunities that the new digital landscape is creating for entrepreneurs, how to navigate the challenges, and where to look for the right partners and solutions, don’t miss this VB Live event!
Register for free here.
- How the fintech ecosystem is evolving — and how fintech in a box is changing the landscape for developers
- The most important APIs to avoid reinventing the wheel
- How to ensure your data is accurate, reliable and diversified — and why that’s important
- What the fastest growing new fintech segments are
- Ran Harpaz, Chief Technology Officer, Hippo Insurance
- Joe Mocerino, Vice President of Engineering, HomeLight
- Seb Taveau, Vice President, Developer Experience, Envestnet | Yodlee
- Seth Colaner, Moderator, VentureBeat