I’ve been working in this sleepy little backwater of the financial industry, called FinTech, for longer than I would care to admit. For the majority of that time, I’ve had to endure awkward cocktail parties as I told people that I worked in finance or public relations or technology. Quite often I’d say “it’s complicated” and leave it at that.
Then about a year ago something strange happened: people began to drop FinTech in to casual conversation the same way they talked about “cloud” or “the Internet of Things.” For those of us who’ve dedicated most of our professional careers to the space, the sudden recognition is both gratifying and somewhat irritating. How I feel about it is best summed up by an email I received from a friendly competitor who’s been in this industry for about as long as I have:
“My colleagues were passing around the following [FinTech Report] excitedly today … it’s like we discovered cheese!! How can something boring and stuffy that you and I have been doing in our sleep for decades now be the hot new tart in town?!?!?!?”
To understand why FinTech has suddenly shot from president of the chess club to star quarterback, I spoke with six leaders of the FinTech movement: Jon Stein, CEO & Founder of Betterment, Justin Brownhill, Managing Partner of SenaHill, Alex Tabb, COO of the Tabb Group, Jean Donnelly, Executive Director, FinTech Sandbox, Jon Zanoff, Founder, Empire Startups and Evan Rapoport, CEO & Founder of HedgeCoVest. I asked them what was accounting for the surge in interest in this space, what this meant for their recruitment efforts and what got them interested in FinTech in the first place.
This is what they had to say:
Dan Simon: It feels like FinTech has really broken through the public consciousness in 2015. Would you agree?
Jon Stein: Robo-advisors – what the press calls Betterment and its imitators – broke through in 2015, I think that’s fair to say. When we launched back in 2010 at TC Disrupt, we were a voice in the wilderness, saying, “What everyone does with their money is going to change.” But, no one believed us then. We were the only ones saying it – and many had failed before us. Now I think people see that the change is real and immediate, and the question is how fast will everything change, rather than whether it will change. The change has become inevitable.
Evan Rapoport: Absolutely. 2015 is the year FinTech has gone mainstream thanks to a number of tech innovations (which didn’t exist a few years ago) but also an influx of VC money and consequentially a major marketing push around all these products. Some of these solutions – such as Robo advisors – have been around for longer than a couple of years, and predate the Betterments of the world, but it’s been the recent marketing around the host of FinTech solutions that has really pushed the industry to the forefront.
Justin Brownhill: We would agree. The macro trend that we are experiencing is that the distribution efficiencies of the web is providing consumers both choice and digestible financial education/information for the first time in history to a much wider audience. Whether it is for borrowing purposes (ie. P2P lending), financial planning (ie. Robo-Advising), buying stocks or bonds (ie. online brokerage) or efficient payments (ie. mobile/electronic payments), the consumers now have the power to make a BUY decision, rather than being SOLD financial products. This represents a seismic change from the brick and mortar and other historical relationships. There is a whole new generation, the millennials, who are self serve, and inclined to conduct business differently than other generations. It’s a significant trend.
Jean Donnelly: FinTech has certainly attracted a lot entrepreneurial talent and a lot of capital in the last few years. As customization of financial services becomes more prevalent, and folks are using advanced technologies in other areas of their lives, people become more aware of the need for improvement in this space. However, some of the best FinTech innovations will be invisible to consumers and seamlessly integrated into their lives.
Alex Tabb: There is no doubt about it, FinTech is one of the hottest areas of technology investment and a whole lot of people are paying attention. There are a whole new group of non-traditional investors and innovators looking at the FinTech space and developing new technologies and services that have the potential to revolutionize the way we think about the sector.
Jon Zanoff I don’t see HBO doing a FinTech spinoff any time soon. That said, we have seen a surge in interest in several sectors. For instance, every major government organization we work with are spending time and resources to ensure they’re sponsoring innovation in FinTech.
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