It seems like every day a new business launches, and the model is so robust and evident that it makes us say “I wish I would’ve thought of that!” That thought is generally followed up with pressing questions: What can I learn from these ideas? How can I advance my own profession?
For professionals in the finance space, one thing is for sure, the future of all things money-related is digital. Here are a handful of digital fintech innovations that caught our eye, and have us asking–what’s next?
1. Digital Lending
Improved consumer analytics have made lending more accurate than ever. Lenders can better assess risk and borrowers can find products more in line with their personal financial situation. Companies like Blend aggregate data to make the lending process less paperwork-heavy and faster-paced. Borrowers can quickly uncover the information they need to secure funding, and lenders can eliminate some of the follow-up based on increased access to information, making the entire process streamlined.
Digital lending can foster a way to help your financial services customers secure funding quicker than ever before.
2. Personal Invoicing
Getting paid on time is a significant problem facing sole proprietors, freelancers, and small business owners. Invoicing has slowly transitioned from snail mail to email to digital means like PayPal. While the ease of sending an invoice has been addressed, the ability to receive funds quickly remains unchanged. San Francisco-based Fundbox seeks to disrupt that through a personal invoicing system. Fundbox is a way for businesses to advance payments for outstanding invoices and allows business owners and freelancers to instantly get paid for their work.
Personal invoicing can ensure small businesses and sole proprietors get paid in a timely manner.
3. Customized Insurance
Consumer data is shaping the way we can customize services across the board. One service, in particular, is insurance. Fit Sense is a company that has started to aggregate health data from wearable fitness trackers, like Fitbit or Apple Watch, and is turning the data into predictive analytics for insurance companies. The goal is to customize insurance premiums and offerings based on an individual’s needs and current fitness habits.
Predictive analytics ensures that insurance coverage fits the needs of individuals more specifically and tailors premiums and coverage more accurately.
4. Payment Cybersecurity
Cybersecurity for the fintech industry is becoming increasingly difficult to manage, mainly as:
- The use of third-party vendors grows
- Data exchanges increase cross-border security threats
- Technology evolves to become more sophisticated
Cybersecurity must keep up with new and convoluted payment systems, and when it doesn’t fraud goes undetected. One company, Trulioo, is working toward instant identify verification for payment transactions to help prevent and detect fraud.
The faster a transaction can be verified, the less room for fraud and data breaches.
5. Digital Credit Repair Services
While credit repair has existed for decades, digitizing the service is a new space. With the latest iterations of technology, credit specialists are now equipped with data to provide automated services that historically would take hours of manual effort. For example:
Business Software Integrations: Credit repair tools now have APIs that connect to your existing lead generation software, bookkeeping software, and CRM software to help organize and grow your current business.
Automated Dispute Process: Credit repair services are especially valuable to clients who need to dispute items with the bureaus or creditors, which can take months of follow-up to complete. With a digital process, the work can be automated, reducing work for both customers and providers.
The best part is that credit repair services can be an add-on to other financial services or an individual venture.
Digital credit repair makes for a more customized and hassle-free customer experience.
Learn how you can add a digital credit repair solution to your financial services business for an additional stream of revenue.
Understanding Bitcoin as an Investment
Analyzing Bitcoin as an investment
Bitcoin has been at the forefront of financial news for a while now. More people want to also understand bitcoin as an investment. Every day, more and more talk about Bitcoins is occurring, not only as a digital currency but also as a financial investment. Many people are intrigued by this digital currency, but they also have reservations about it as well. For now, we will discuss how to evaluate bitcoins as an investment.
There are Bitcoin exchanges, just as there are stock market exchanges. As of November 2017, the largest full-trading Bitcoin exchanges that are available to everyone include, Bitstamp (a Slovenia based exchange), Bitfinex allows you to swap or buy Bitcoin, Litecoin, and Darkcoins. Coinbase is based out of San Francisco in the United States and touts itself as a one-stop solution for Bitcoins. Cryptsy, based in Florida deals with most of the altcoin currencies. BTC-e (based in Bulgaria), and Kraken (based in the United States). The world’s largest Bitcoin exchange, BTC China, is based in China, but that exchange only allows exchanges of bitcoins for Chinese Yuan/Renminbi.
In order to open an account with these exchanges, you usually have to link a bank account to your Bitcoin exchange account, as you need to wire transfer the money for bitcoins to use in your account. Credit cards and PayPal are not options [at least not at the time of writing] because the transactions can be reversed very easily, whereas a wire transfer cannot be reversed (Need financial advice on this?)
Usually, only bank accounts from that specific exchange’s home-based country can be linked to the exchange account (for example, CoinBase, based in the U.S., only allows U.S. bank accounts).
Like the financial stock markets, bitcoins fluctuate in value against real currencies such as the U.S. Dollar, the Euro, the Japanese Yen, and others. One important distinction between Bitcoins and real currencies to this point in Bitcoin’s history is the fact that Bitcoin’s valuation has been much more volatile than real currencies.
In December 2013, Bitcoin’s valuation went from about $675 down to about $425 within twelve hours, about a 37% drop in valuation. That is virtually unheard of with any real currency (barring something major like The Great Depression or some other major economic event).
The reason that this sharp drop in valuation took place is that the People’s Bank of China told third-party payment processors that they should have nothing more to do with Bitcoin exchanges. As a result, Bitcoin kept getting cut off from being supplied by the payment processors; in fact, Bitcoin was cut off by three payment processors inside of a week. Banks have also been told to not deal with Bitcoin any longer.
This event reflects the major concern that most financial experts have about the currency. Many feel it is too volatile as an investment, leading to sharp price spikes and declines that are virtually not seen in other currencies, the equity market, or mutual funds. Most financial experts feel that the digital currency must stabilize in value and not be so prone to such rapid peaks and valleys for it to be taken more seriously as a solid investment.
In the past, the problem that many financial experts and institutions have had with Bitcoin is that not enough is known about how the currency is mined and how it is “regulated”, so that the currency stays on track of having 21 million bitcoins in the year 2140.
While safeguards are in place to keep the currency on that path, there have been attempts to try to disrupt the network and give a few select bitcoin miners the ability to mine as many coins as they wish. There has also been concern that a group of miners could combine together, and work toward their mutual benefit, and to the detriment of everyone else on the network. This would occur by harnessing their mining power to get more coins for themselves and leave little to the rest of the network.
Some will always question and doubt how legitimate of a currency Bitcoin is, including its true valuation. This is likely due to the fact that Bitcoin was the first digital currency, and financial experts are unsure of how to truly evaluate its worth.
More and more companies are starting to accept it as payment, but not enough is known about the mining process and how it can maintain itself to fulfill the promise of 21 million bitcoins in the year 2140. Plus, Bitcoin can be susceptible to wild value peaks and valleys whenever an event associated with the network takes place, such as when Chinese third-party payment processors and banks are told to not deal with Bitcoin exchanges.
Large companies such as Stripe and Shopify are now accepting Bitcoins as payments. This trend is only going to increase.
However, in 2017, one Bitcoin is valued at over $7000 US dollars. So, it has gained ground as an accepted currency in the digital world and does have a high-value these days.
What Baby Boomer Retirement Means for New Financial Service Professionals
Baby boomers are aging, and their retirement is making way for newer financial service entrepreneurs. With more jobs opening up and the digital world changing at an accelerating pace – professionals starting their career are in an ideal position.
A retiring generation not only means a new workforce, it also means new ideas and methods that can further modernize the financial service industry. Read on to learn how baby boomers phasing out of the industry, along with new technology in the financial services market, is setting up financial service professionals for success.
5 Ways That Credit Repair Benefits Financial Services Businesses
Are you looking to add a new offering to your business skill set? Credit repair is an in-demand service that goes hand-in-hand with other financial services. Not only can repairing credit for your clients increase your revenue, it can also help you retain clients for other financial services. Read on to learn five ways credit repair can benefit your financial service business.
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