Fintech


We are all concerned that robots are scheming to take our jobs.  Inefficiencies in all industries stoke the robot concerns and fuel the Silicon Valley investors' belief that they can optimize every issue.  Our blog this week will look at the main fintech solutions from both sides and hopefully allay any concerns that robots will take all of our jobs.

Inefficiencies

Potentially successful fintech  solutions can be identified with an honest business model evaluation that will show procedures that are consistently experiencing issues.  Optimizing procedural performance should also increase profit margins that are being squeezed by fee compression.  This reality alone is a good reason to consider fintech solutions for your business.  A recent research report from Aite Group is a good place to start. Their Digital Advisory Matrix of nine solutions identifies several solutions that should be investigated. Our favorites include Client onboarding, Portfolio constraints/compliance and Fee billing.

Experience

Fintech needs to be a team effort. Technology professionals can use algorithms to optimize most procedures.  The problem with algorithms is that most technology professionals have never worked in financial services.  Most financial services professionals have ever coded either.  Seem like one plus one could equal three. Robos are learning this the hard way as their growth has hit a wall and established firms have learned that just providing tools on their website doesn’t get the job done either.  A recent study by an unnamed large financial firm proves my point. The firm’s study identified the clients with the best performance but upon further review most of those clients had forgotten their online password and not logged on in years.

 
Profit

Effective fintech solutions need to deliver on two fronts to be successful.  First they must make the financial professionals’ life easier.  The second is they must increase the business’ profit margin.  This it is a good news - bad news proposition as the high margins are delivered by decreasing the headcount needed to operate the business. Decreasing the headcount is a consulting term for firing current employees. I knew we couldn't trust the robots!



We have accepted that a computer controls 95% of commercial airline flights.  That leaves us with 5% to pay the pilots.

Comments

  1. Jeff SpearsOctober 29, 2018 at 5:24 AM

    This comment has been removed by the author.

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  2. Jeff SpearsOctober 29, 2018 at 5:32 AM

    Buffet just jumped in the Fintech pool

    https://www.wsj.com/articles/warren-buffetts-firm-invests-millions-in-fintech-1540807200?mod=hp_lead_pos4

    ReplyDelete

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