How Financial Startups Are Driving Industry-Wide Change

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

There is an ongoing revolution in finance-driven by startup culture—and it’s about more than just looking cool or revising a stale, old brand to become trendier. There have been major shifts involving the very services and products financial institutions offer. Here are some of the most dramatic changes that fintech startups have brought to the finance world:

Integrating Tech Into Financial Products

The rise of fintech startups has led to surprising innovations in the way technology and data are used in alternative financial products to make them more convenient, secure, and user-friendly. 

Buying stocks is now something you can do from your phone, in between scrolling through social media and texting your roommate to grab milk on their way home. Customers can pay for dinner or lend their friend a few dollars, all without ever touching their wallet. They can deposit checks, open bank accounts, apply for loans, all without ever stepping foot inside an actual bank. 

“During a time when mobile devices are fully integrated into our everyday lives, fintech solutions that bring traditional banking services to our phones are completely reshaping the way customers connect with financial institutions and use financial products,” said Phillip Rosen, Founder and CEO of Even Financial.

In 2020, 44% of retail banking customers relied on their bank’s mobile app to access banking services and about half of customers would use mobile check deposit as their first option for depositing a check into their account.

Developing New Financial Tools That Simplify Finance

The trend toward digitizing financial products and services has not only made them more convenient but also more accessible. New markets have opened up among consumers who never had easy access to affordable financial services before.

As the range of customers accessing these services expands and becomes more diverse, startups are increasingly innovating ways to make finance simpler and financial products more user-friendly—whether that’s through building educational content in a brokerage account or creating a budgeting tool in an online banking platform that helps users track spending and set financial goals. 

Budgeting apps like YNAB, for example, walk users step-by-step through the budget making process and allow them to sync all their accounts to the app to track spending and receive custom tips and insights about where to make cuts to better meet their budget. They also offer free workshops and other live educational events in addition to their in-app educational resources. 

Fintech companies like this build education into money management so that users learn as they go and can apply every lesson to their own finances. The idea is that financial institutions should not only provide the tools people need to manage and grow their money, but also provide the knowledge and training to use those tools to make smarter financial decisions.

Automating Financial Services

An extension of the trend toward simplified finance is the rise of automated financial tools. Financial institutions are increasingly offering innovative ways customers can automate different financial services. 

There are apps, like Acorns, that round up each purchase to the nearest dollar and automatically invest that extra change into the stock market. There are budgeting apps, like Truebill, that can cancel unused subscriptions or request refunds automatically, or Digit, an app that calculates how much money you can afford to save and then automatically transfers it into your savings account for you.

All of these transformations driven by startup culture seem to have the same goals in mind: make financial services easy to access, intuitive, and personally tailored to each individual customer.

Photo by Dan Burton on Unsplash

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.