UMB Seminar Explored Fintech and the Future of Financial Services

UMB Institutional Banking hosted a seminar in New York City to discuss the latest trends in fintech and how they are influencing the future of financial services.

Over the course of UMB Institutional Banking’s Fintech and the Future of Financial Services seminar, attended by fintech prospects, investment banking clients, broker-dealers and other financial services leaders, five industry experts highlighted how their firms are responding to trends that are reshaping the industry. For those who couldn’t attend, here are some of the key insights from the event.

Collaboration Between Fintechs and Traditional Financial Institutions

Innovative companies like Netflix have completely transformed their industries, and the banking industry isn’t immune to a similar monumental shift thanks to the proliferation of fintech. Kelsey Weaver, co-founder and chief business development officer at Neocova, discussed how the industry is at a crossroads: banks often lack the attributes of fintechs – fast moving, courageous and exceptional customer service­ – while fintechs lack the data, brand recognition and regulatory relationships of banks.

Weaver doesn’t see this as an opportunity for fintechs to disrupt the industry in a battle against banks. Instead, banks and fintechs have the chance to form beneficial partnerships. Both sides need to embrace the change that comes with collaboration.

Lending and Strategic Partnerships

Katherine Stolz, senior director, strategic partnerships at SoFi, illustrated how SoFi’s customer-first approach has driven their success. With a member-centric focus geared toward lifetime relationships with their customers, SoFi offers products and content accessible through their mobile app.

SoFi has worked to grow its product line beyond lending, and is helping customers at every life stage. In addition to the full product suite of financial tools, SoFi surrounds these products with content that is quickly digestible, as well as professional career and financial support, allowing customers to make informed decisions.

Fintech, Financial Services and Blockchain: Through the Legal Lens

The amount of cash (or lack thereof) you are carrying in your wallet is proof that the digital revolution has already occurred. With more digitization and the continued growth of fintech, new regulatory challenges are emerging and are escalating in severity.

Angela Angelovska-Wilson, co-founder and principal at DLx Law, discussed how fintech companies are facing various regulatory actions against their products and services as they grow and expand their offerings. Because they typically enter the financial services industry with a lack of the institutional regulatory knowledge of a bank, fintechs are morphing from being a competitor to financial services companies. Instead, they are becoming frequent collaborators as they navigate the rocky regulatory terrain.

Lending and Blockchain

According to TJ Milani, chief financial officer at Figure, despite the rise in home equity, HELOC balances have fallen. Meanwhile, falling HELOC balances coincide with the rise of personal loans.

It’s no wonder why: HELOC lenders, on average, take between 30 to 60 days to fund a consumer. The drawn-out process almost always involved a physical appraisal, income document collection and physical closing process. Figure identified this and utilized Provenance, its in-house blockchain technology, to create an entirely automated process that takes as little as five minutes to complete—and five days to fund.

Figure’s successful use of blockchain solves two of the biggest headaches in the industry: income verification and notary process. Meanwhile, they showcase that there are unique ways to integrate blockchain technology throughout financial services to improve efficiency and reduce costs while offering a better experience for customers.

Data Aggregation and the User Experience

Personal Capital’s mission is to transform financial lives through technology and people. As such, Jim Del Favero, chief product officer, shared how Personal Capital provides unrivaled digital wealth management services through its hybrid approach of top-tier consumer technology and best-in-class human advisors.

After a brief connectivity and setup process, Personal Capital aggregates all of its mass affluent investors’ scattered finances and is able to provide customized insights and strategically answer customers’ key financial questions. It’s simple yet sophisticated suite of planning tools allows customers to personalize their spending and savings, project their financial future and build financial confidence.

Much like Personal Capital transforms its customers financial outlooks, collaboration between fintechs and banks has the potential to alleviate regulatory challenges and turn today’s uncertainties into long-term success.

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Originally Posted to: UMB Blog