May 14, 2017
This week, we look at emerging changings in the financial ecosystem: SoFi’s continued evolution, the Brazilian FinTech boom, and a new banking core (with a familiar name).
SoFi is one quirky lender. It literally plays matchmaker, as in offering a dating service to ‘members,’
When talking about FinTechs, Aditya (our CEO) often says to me, People forget the Fin is old and the Tech is new. I think this is important to remember. SoFi is adding is showing us one more aspect of what is old (and important!) – people. Truly getting the customer experience right is much more than a comprehensive customer journey or beautiful interface – it’s understanding each user is a person. Don’t get me wrong – it’s very hard to do. How many incumbent financial services companies are fostering a sense of community? Financial services companies are integral to people’s lives but while most of us are focused on fancy chatbot, others are connecting people the old-fashion way, face to face.
There are also more startups and investor interest in back-end versus consumer-facing solutions in fintech, or what we call ‘the kitchen, not the saloon’ in Brazil.
We keep saying this but it’s critical to remember: FinTech is just getting started. Asia is leading the way but the transformation within emerging economies will be significant. Many people say mobile-first but the problem with that in more mature markets is that we aren’t truly mobile first people – we’re still stuck on our laptops, desktops, and paying with plastic cards. Looking toward the future, it’s a huge advantage to FinTech companies starting in places like Brazil where their customer base lives with a mobile-only approach. Oh and the focus on ‘the kitchen, not the saloon’ will set up FinTechs in Brazil for a very interesting future.
I'd give Frank as good a chance as anybody in this startup environment, because to my knowledge he's the only one to have been down this road before.
It’s hard to talk to anyone in FinTech who doesn’t seem to put a lion’s share of blame on incumbent core banking providers as a major impediment to financial services transformation in mature markets like the US and EU (It should also be noted that bankers don’t exactly have a pushing the envelope reputation either). People keep clamoring for a new core, a new foundation to make the ‘tech heart’ of a bank align with modern technology. So in the case of Finxact, a new Core-as-a-Service, and Frank Sanchez, the tech is new and the team is experience. This sets Finxact up for as good a chance as any to make some waves in the core banking market. And if you’ve been following me on LinkedIn, you’ll know my biggest question is who wants to be king, challenging the old guard and who wants to be rich, selling to the old guard?
We’re sharing articles each Sunday. Tag @letstalkpayments or @patrivenbark on social media if you think there is a ‘must read’ from the week!
See you next week!