Culture and Talent

Real-time payments and portable identity: The most underserved areas in financial technology

  • Software company Plaid has put out a "request for startups" as a call for innovation in underserved areas of fintech.
  • Industry watchers note that a focus on solving customer pain points or bigger issue areas could drive innovation forward.
close

Email a Friend

Real-time payments and portable identity: The most underserved areas in financial technology

When it comes to underserved areas of the fintech ecosystem, there most definitely is not an app for that.

With a growing ecosystem of startups and upsurge in venture capital-backed investments globally in financial technology (a recent KPMG study revealed that global venture-backed investment reached $13.6 billion last year), software company Plaid issued a “call for startups” this week to nurture innovation in areas it says aren’t getting enough attention.

The company has built a technology platform that lets third-party applications connect with users’ bank accounts. The company’s CEO Zach Perret told TechCrunch it hopes to be part of the process to build businesses working in these areas.

While it isn’t clear what form Plaid’s startup mentorship will take — the company said it could take the form of resources, connections, and capital — among a series of consumer-facing financial technology tools, banking and back-end infrastructure. In the personal finance space, the company would like to see more work on bills (letting consumers better monitor and understand their bills), loan servicing, exploring new areas of insurance and tax preparation.

Industry analysts who spoke to Tearsheet said they liked what they saw on the list and had some ideas for expanding it.

“The initiative is important because financial services and the payments systems have evolved into regressive services where the poor are spending a much higher share of their income than the rich are [to access financial services], said Aaron Klein, a Brookings Institution fellow and director of the Brookings Center on Regulation and Markets.

Klein said one area that could benefit underserved markets are innovations that allow for real-time payments and adaptive technologies based on real-time payments that would help people manage their money in alignment with their goals.

Others add that some context around the thinking could help frame the product offerings in terms of issues to be resolved.

It is not clear to me what the framework for this is,” said Peter Wannemacher, senior analyst at Forrester Research. “Two things I would like to see: One is life events — Forrester research shows that the No. 1 driver of financial product purchasing are these big shifts and shared finances, or any situation in which one person acts as an observer of a partner in or as a proxy for another person’s finances.”

Additional areas that could be included are the notion of ubiquitous or portable identity (digital identity that can move between countries); poverty and multigenerational wealth management; platform partnerships between fintech companies and banks; insurance data management; and access to credit, said Bradley Leimer, managing director and head of fintech strategy at Explorer Advisory & Capital.

For those in the personal finance startup space, it’s about grouping the issues around a context to solve customer pain points.

“It’s about putting it into a broader context and creating business models to help consumers improve their financial lives,” said Colin Kennedy, chief revenue officer at Clarity Money.

For Plaid, the initiative is about putting a focus on financial inclusion.

“At Plaid, we believe that everyone, regardless of where they bank, should have access to the best financial tools and services,” said Perret. “We launched the request for startups to help highlight a few areas of fintech that have a lot of room for growth. New businesses in these areas will not only digitize existing processes, but in some cases will drastically change the way all live our financial lives.”

0 comments on “Real-time payments and portable identity: The most underserved areas in financial technology”

Culture and Talent

“In the good ol’ boys club, knowledge is shared on golf courses, at country clubs, and in locker rooms”: Stax CEO Suneera Madhani on the gender gap in fintech

  • While women comprise 52% of entry-level financial services jobs, the representation of women from entry-level to the C-suite in the industry falls by 80 percent.
  • The need of the hour is for the industry to dedicate itself to the cause of gender equality, holding big VC's and organizations directly accountable.
Subboh Jaffery | May 18, 2022
Culture and Talent

‘Tenure is one of the biggest predictors of overall success’: Inside Bank of America’s workforce reskilling strategy

  • Bank of America’s reskilling efforts play an important role in its employee development and retention strategy.
  • A key area of focus for the bank is retaining its existing employees by offering internal promotions and reskilling opportunities.
Ismail Umar | November 24, 2021
Culture and Talent, Member Exclusive

‘Injustice and inequity constrain our economy’: New coalition wants to advance racial and economic security in financial services

  • A coalition of 18 financial institutions has recently announced their commitment to improving racial and economic equity in financial services.
  • The coalition includes leading companies such as Morgan Stanley, Goldman Sachs, and Bank of America.
Rimal Farrukh | June 01, 2021
Culture and Talent, Member Exclusive

Collaborative spaces, hot desks, and hybrid work models: Fintech firms gear up for work in a post-pandemic world

  • Hybrid work models are becoming more popular as the pandemic recedes.
  • What does this mean for the future of financial services and fintech firms?
Ismail Umar | April 16, 2021
Culture and Talent, Member Exclusive

‘Large swaths are severely underfunded’: How financial services can improve children’s mental health

  • Depression, anxiety and additional mental health disorders have been increasingly affecting children and young adults since the beginning of the pandemic.
  • The Morgan Stanley Alliance for Children’s Mental Health is tackling the mental health epidemic through investment and partnerships with mental health non-profits.
Rimal Farrukh | March 25, 2021
More Articles