Jun 10, 2021

FIVE things fintechs must do to keep investors onboard

Fintech
Investment
venturecapital
AI
Brandon Rembe, CPO, Envestnet...
4 min
Fintech innovations drew in first-time investors who reshaped the markets. What new advancements will help them continue their rise?

New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.

Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?

The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.

Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.

Equal access to financial wellness education

Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.

The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.

More personalisation

Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.

For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.

Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.

The rise of AI-Powered Advice

Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?

Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs. 

Focus on financial mental health

New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.

It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.

Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.

Gamification for good

The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.

Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.

Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.

The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.

Share article

Jun 8, 2021

Tiger Global invests in construction fintech startup, Briq

Briq
TigerGlobal
construction
Fintech
3 min
Tiger Global led the US$30m funding round for Briq, which serves the construction industry by providing project finacial planning and forecasts

The North America investment giant, Tiger Global, has backed the Santa Barbara-based construction startup Briq in its latest $30m Series B funding round. 

According to reports, the financing round is one of the largest Series B fundraises by a construction software startup, and brings Briq’s total raised to $43m since launch in January 2018. 

The round was also supported by Briq’s existing backers, Blackhorn Ventures and Eniac Ventures.

Briq fintech and construction

Briq’s offering enables contractors to manage their budgets and go from “plan to pay” via a single, integrated, and user-friendly platform. 

The endgame is to help companies avoid going over budget on construction projects and the company’s strategy for expansion sees it aiming to  manage 80% of the money workflows in construction by 2031.

The fintech was founded by Wall Street veteran Ron Goldshmidt and Bassam Hamdy - a former executive of Procore who self funded the initiative during his time at Procore after recognising the need to improve inefficiencies on the financial side of the construction industry. Hamdy was also formerly employed by CMiC.   

According to a recent McKinsey study, approximately 80% of construction projects run over budget, which causes waste and profit losses for companies. Data shows Briq’s platform helps contractors identify outliers, and which projects are more at risk.

Briq and automation for financial planning

Briq’s offering consists of a financial planning and workflow automation platform that reduces the time it takes to run essential financial processes. It also improves the accuracy of forecasts and financial plans. 

The company, which currently manages $30bn in construction volume across 150 customers, also says its toolbox of proprietary technology enables it to extract and manipulate financial data without the use of APIs. 

Briq has developed construction-specific data models that build out projections and create models of how much a project might cost, and how much profit be made. 

Briq platforms for construction projects

Currently, Briq has two main offerings, namly the Briq’s Corporate Performance Management (CPM) platform, which models financial outcomes at the project and corporate level, and BriqCash, a construction-specific banking platform for facilitating invoices and payments. 

The fintech, has exceeded all expectations in terms of growth, and over the past 18 months has seen its ARR grow by 200%. The workforce has also increased three-fold, with Briq now employing 100 staff members , compared to just 35 employees 12 months ago.

Speaking about the latest funding round, which will be used to expand all of Briq’s offerings, Hamdy reportedly told the technology industry journal, Tech Crunch, “I wanted to figure out how to bring the best of fintech into a construction industry that really guesses every month what the financial outcomes are for projects.”

He continued, “Getting a handle on financial outcomes is really hard. The vast majority of the time, the forecasted cost to completion is plain wrong. By a lot.”

Hamdy added, “In an industry where margins are so thin, we have given contractors the ability to truly understand where they stand on cash, profit and labor.”

Image credit: Crunchbase - Bassam Hamdy and Ron Goldshmidt

 

Share article