2018 was a big year for fintech. Mo' money flowed into the sector as eye-popping financing rounds bestowed war chests on some later stage firms. Cryptocurrency pricing took a massive nosedive after being massively bid up at the end of 2017.
Insurtech stepped out into its own, proving there is interest in creating new models to go direct to consumer. Challenger banks proved they really are a thing and that they can build real client bases. Data aggregation has demonstrated it's an important fintech rail off of which new financial apps and ecosystems will be built.
Some bloom came off the startup rose, too, as it became clearer just how hard -- and expensive -- it is to build a financial services company. Though we had no big blowups, expect 2019 to include at least a couple dead unicorns.
After all is said and done, 2018 was a coming of age year for the sector. Here are Tearsheet's top 10 articles for 2018.
Back in April, we broke the story that GS was hiring Justin Schmidt as its new head of digital asset markets. Rumors abounded that the bank would provide clearing and custody for clients who wanted to hold cryptocurrency. This story seemed a turning point, revealing Goldman's intentions for the sector.
But alas, the firm denied anything was happening.
“In response to client interest in various digital products, we are exploring how best to serve them in the space,” Tiffany Galvin, a spokeswoman, said in a statement. “At this point, we have not reached a conclusion on the scope of our digital asset offering.”
Eight months later and the firm
still can't hold clients' crypto.
2018 was a notable year for conversational interfaces. The first half of the year saw many of the big banks launch versions of their own bots. While the bot PR has subsided during the back part of the year, financial institutions continue to explore how to tap into the popularity of chat-like communication.
For its part, Bank of America assembled a team of 100 from around B of A to teach and improve erica, its voice- and chat-driven product . erica is designed to help customers manage their financial lives using predictive analytics and cognitive messaging.
Early in 2018, Chase rolled out six “Everyday Express” branches in New York City and Culver City, California with a Digital Advice Bar to help customers learn how to engage with Chase digital products and video conferencing to connect customers with companion branch bankers for more complex matters.
The idea is the branches will be smaller and offer simpler services like account openings. For more complex things like a home loan, customers would have to videoconference with a banker, or just go to a regular branch.
We haven't heard more about how this format performed or Chase's plans for expanding this format in 2019.
While Chase was rolling out new digitally-focused Express branch formats, the bank rolled out Finn, Chase’s digital-only mobile banking app, to iOS users in June.
Keeping with its focus on digital, mobile-first customers as a testing ground, the marketing plan is entirely digital, centering on paid social media ads (Chase isn’t saying more beyond an Instagram presence), digital banner ads and videos.
We'll see in 2019 how well the new brand and product are performing.
In many ways, 2018 was a year of the challenger bank. Firms like Revolut, N26, and Monzo are showing that they can attract users internationally -- surprising many in the industry. Revolut's ambitions are global and it just picked up its
European banking license.
Revolut was the first of its competitors to reportedly reach break-even status. It's generating revenues by employing a fremium model. Revolut gives basic bank-like services away for free -- things like a current account, foreign exchange, and ATM withdrawals. But if you want a higher level of customer service, baggage and flight insurance, overseas medical insurance, and cash-back, you'll have to pay a monthly subscription fee.
This story was an important one about financial incumbents, long renown for their bolt-on strategy of adding multiple layers of new tech on top of old tech. Legacy technology becomes a liability and a money pit.
Capital One, for its part, wants to free itself from the technology ball of yarn by kind of starting over, creating a new approach to products and product development.
“If you’re too limited in the way you think about a product, you’ll only create the things you produced yesterday, but just slightly more automated,” said Sanjiv Yajnik, president of financial services at Capital One. “The real power is shifting the way in which you think about the product. Customers today are demanding products and services that are seamlessly integrated into their lives.”
There are so many lame end-of-year articles that try to predict what's going to happen in the new year. We took a different approach -- for this article, we went out and crowdsourced the top trends in insurance and insuretech from the people on the front lines.
To assemble this piece, we asked senior executives at firms like Northwestern Mutual and Legal & General America. We also spoke to founders at the upstart insurtech firms, who are selling into the incumbents or creating direct to consumer models around the incumbents. The result is a sweeping post about major themes like personalization, AI and machine learning, and the move to the cloud.
The industry's response to Venmo's success, Zelle processed $25.1 billion across 85 million transactions in the first quarter of 2018. And while the early problem Zelle addresses was peer to peer payments, the firm's biggest opportunity is to service business-consumer payments.
This article dives into the challenges and opportunities presented by trying to roll out Zelle to every bank in America and examines what type of education is required to increase usage of the platform.
Goldman Sachs' digital offering, Marcus had a big year. Since launching in the US and the UK, the bank quickly attracted billions of dollars in retail consumer accounts. Now, GS seems
ready to merge Marcus with its investment division.
Gone is the posh and the exclusivity of Goldman Sachs. Marcus literally takes to the streets, talking up its relatively-high interest rates on its savings accounts. By looking at its recent ad campaigns, man on the street interviews, and talking to its head of marketing, we dove into Marcus' strategy to become a major force in consumer banking.
Well-regarded in the tech industry as a framework to solve wicked problems, design thinking and the financial industry don't have a long history together. That's changing, as incumbent firms use product and design methodologies popular in other industries and with startups.
Senior leaders at Nationwide spend significant time in front of customers, trying to understand their needs better. And it's focus-testing a holistic, life-stage approach that’s making its way into its marketing programs.
Insurers have typically promoted their offerings on a hard-sell, single-product approach, but now, the company is trying to reach customers by getting a 360-degree perspective of their lives organized around stages. These could include sending a child to college, raising a baby or planning for retirement. It’s a customer solutions-focused approach synonymous with design thinking.
