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Hi 5! The top five fintech stories we’re following today

top 5 weekly fintech stories

Can fintech drive new auto lending?

Startups smell money as the auto industry has bounced back post-2007 (there is an estimated $1 trillion in auto loans outstanding in the U.S.) New partnerships, like the kind Ford struck with AutoFi this past week, are being inked between auto lenders and fintechs. There are still plenty of opportunities to improve the buying, lending, and payment experience in the car market.

 

Forget fintechs. Focus on GAAF

It’s becoming a more common theme. The financial industry is waking up to the fact that today’s tech giants, Google, Apple, Amazon, and Facebook, are interested in securing their piece of the financial industry pie. A recent Accenture survey polled investors found that a lot of people were definitely open to receiving investment advice from their favorite tech firms.

Whoever wins the race for the future of fintech, it’s about humans. And has the potential to be massively more inclusive than our system today. And may be located in…Florida?

State of the business: Online lending

online loan growth for SMBs

There are a lot of new options for businesses to go online to access working capital. Even so, very few businesses are turning to these alternative sources and that means they’re struggling with cashflow. That may begin to change as more alternative lenders and banks collaborate.

Financial media generates growth

Technology hasn’t been kind to the media industry. Financial media also suffers from the same trends impacting the industry as a whole: decreasing engagement, struggling ad sales, and noisy alternatives. But Bloomberg has found a way to restart traffic to its homepage.

As media firms have become leaner, that’s meant there are fewer people on staff to work on new products. The FT created a new special projects editor to help bring good ideas to life. Early results look promising.

The year of the 1099er

As the gig economy includes more people taking on project-based work, a growing number of Americans file 1099 forms when they do their taxes. The online tax software industry is all over this trend, launching new products to service DIYers. Many of these services have free versions, like Credit Karma’s new offering. Credit Karma will make money, just like it does with the 60 million users of its free credit scoring service, by making referral offers for credit cards and loans.

Financial firms are trying to connect our financial dots. That’s why the JPM-Intuit partnership is a big step for data sharing.

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WTF is the OCC fintech bank charter?

explaining common fintech jargon in simple language

In a speech given on December 2, 2016 at the Georgetown University Law Center, Thomas Curry may have permanently changed the paradigm for fintech in the U.S. Curry, the Comptroller of the Currency, revealed more details about his organization’s intention to create a special purpose national bank charter for fintech companies.

Reviewing regulation can be boring but in this case, it’s worth studying the Office of the Comptroller of the Currency’s new plan to enable fintech companies to act more like incumbent banks, offering core banking services like taking deposits and issuing loans.

So, what is the Office of the Comptroller of Currency and why is it getting involved in fintech?
Established by Abraham Lincoln, the OCC is an independent bureau of the U.S. Department of the Treasury. Its mission is to “ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations.” The OCC can do that because it charters, regulates, and supervises all national banks and federal savings associations.

Makes sense. But, what would the fintech bank charter actually accomplish?
Without national bank charters, fintech firms are generally regulated at the state level or end up partnering with chartered banks. Both options are expensive and place a heavy compliance burden on young companies. It would make sense, then, to standardize oversight of fintech firms that want to handle deposits, move money, or issue loans. The idea is that a single regulator can help simplify compliance and encourage innovation and competition.

So, that’s a good thing, right?
In theory, yes. For the fintech industry, this new charter could be a bonanza for them by giving new tech firms the green light to compete more directly with the incumbent banking industry. Recognizing the challenge and opportunity of opening up financial services to more innovation, the OCC created an Office of Innovation last October. In December 2016, the OCC issued Exploring Special Purpose National Bank Charters for Fintech Companies, a white paper that attempted to clarify the organization’s vision of the future of U.S. financial industry.

In theory, this banking charter would encourage broader financial inclusion in the U.S. banking industry by providing more options to the unbanked and underbanked. And because fintech firms would now be regulated nationally, similar consumer protections required of banks could be applied to younger technology firms.

Is this going to happen then?
Maybe. A variety of organizations are jostling for position in helping structure the U.S. fintech industry. For its part, the White House just issued its policy framework for oversight of the fintech ecosystem. The Consumer Financial Protection Bureau also has a role in making sure fintech companies treat consumers honestly.

The incumbents are less comfortable with all this. The CEO of the Consumer Bankers Association has stated publicly that the OCC should slow down and take a deeper, more methodical look at fintech — much like the Federal Reserve did when its initiative of faster payments. Democrats also called for revamping of the charter to ensure predatory lenders aren’t “given the blessing of the federal government”. A couple of senators even cast doubt on whether the OCC has the authority to create a new type of charter like it intends to do.

Despite the sound and the fury, nothing’s happened yet. The OCC has been accepting comments on its proposed fintech banking charter. The regulatory moat around banks has vastly increased since the 2007-2008 financial crisis, massively increasing the carrying costs of being a regulated financial institution. There are conflicting opinions on whether the OCC’s proposed fintech banking charter accomplishes its goals of encouraging competition while protecting consumers and the integrity of the banking system as a whole.

As a new administration enters the White House in just a few days, it’s not entirely clear what will happen.

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A day in the life of Clarity Money’s chief data scientist

As fintech algorithms and big data solutions become increasingly advanced, the role of chief data scientist has turned more strategic. That’s because the role contributes to product, marketing, and sales teams. It’s even more core when the chief data scientist is a co-founder like Clarity Money’s Hossein Azari.

We followed Azari around to see what he works on in a typical day working at the personal finance management firm he co-founded with Michael Dell’s brother.

Hossein Azari at Clarity Money

7 a.m.: Wake up, have some orange juice and spend some time gathering my thoughts and planning for the day. Really, I’m already working, using the time to put all technical issues to the side, and remember some of my big picture goals. These can include going over first principles like putting the user first or creating consistencies in data platforms and interpreting how these impact our current tasks.

8 a.m.: Have breakfast, usually eggs, and check school-related emails from the executive MBA at Columbia Business School I attend on Saturdays… so every second of time is precious!

8:30 a.m.: I read while on the subway (the 6 train) — mostly fintech news and summaries from different sources. The fintech industry has such a large group of entrepreneurs and investors that being up to date with the direction and pivots of the industry is crucial for making decisions, like what we should focus on building. Or, should we build a system that’s objectively superior or should we build it only to be better than our competition and move on to another system?

9 a.m.: Sit down at my desk at Clarity, log into my computer and immediately start reviewing metrics and KPIs for each of our systems. I then go over emails and messages. I monitor the performance of different algorithms and models that we have built and discover bugs, inefficiencies or decide to improve parts of the system based on day to day monitoring.

10 a.m.: Sync with data engineers to discuss questions and issues about new tasks and to set the methodology requirements for new additions to our product. We also take the time to talk about an issue with our current algorithms, formalizing a solution. Our goal is to make sure the user has the best, most optimal experience.

10:30 a.m.: Execute ideas we have on new algorithms and models. Frequently, I’ll deep dive into our data to shape new metrics, building intuition about our users in a search to find patterns. We build insights based on users’ financial data and provide these insights in an actionable way to the user. This task uses statistical methods to accurately estimate and detect parameters such as income, outliers and spending patterns. We also employ high-level intelligent systems that react to users’ interactions with the insights presented by the Clarity app and present them in the most efficient way for each user.

Noon: It’s time for lunch, sometimes with a friend or catching up with a former colleague in town. We order in or walk out for lunch with the team. I set up my lunch meetings in Burger and Barrel (my favorite) right next to the, but my colleagues often talk me into to Chopt for a salad.

1 p.m.: As co-founder and chief data scientist, I need to wear different hats. Depending on the day, I attend different types of meetings that include investor meetings, interviews, and just brainstorming with the team. I have clear goals for our data science efforts and I make sure to communicate well with stakeholders and receive feedback. I also spend some time to think about larger problems that need alignment with our data science approach.

2 p.m.: Some more programming and model building or writing up, documenting ,and logistics planning. This is mostly my solo time when I am in front of my double screen, writing and running things. I enjoy this part a lot, especially after a full day of  meetings, chatting, and lunchtime burgers.

5 p.m.: The team gets back together once again, and we solve some problems together. This mainly involves following up on the day’s tasks that are being implemented and understand where we stand for tomorrow.

6 p.m.: Leave office…on a good day. It really depends on the tasks, deadlines, and problems that need to be solved that day.

6:30 p.m.: Either attend an after work dinner with a friend or former colleague from Google or Harvard or current colleagues from Columbia. Sometimes I attend a meetup and meet new people. I try to attend major meetups and conferences and make sure to have an exposure to key people in the fintech industry. Reading news on fintech companies is helpful but by talking to people from these companies, I can learn much more about the fintech scene.

If I don’t have any plans, I go home and have dinner with my wife, Elham, spending some time discussing our days. She is a research fellow at Memorial Sloan Kettering Cancer Center and uses machine learning and data science to tackle problems in cancer research. It is very inspiring and refreshing to hear about how data science is being used to tackle one of the biggest health challenges of our time.

8 p.m.: Work on some of my school projects or my reading list. I like to read from people who have experienced and done great things, especially in the tech sector, and live through their challenges while reading about them. Andy Grove’s biography has inspired me a lot. The next book on my list is Shoe Dog by Nike founder, Phil Knight.

11 p.m.: Go to bed, rest from the day, and get ready to conquer the new challenges I’ll face tomorrow.

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Anodot’s automated business dashboards put big data in the hands of business people

bi and analytics, big data at Anodot

In many organizations, big data and analytics reside somewhere between the IT organization and marketing. That’s primarily because of the technical barriers around the stop-and-start nature of most analytics programs. To get an answer to a business question, someone — typically with some technical chops — has to write a query on the data to get at the answers.

That’s changing. For organizations to leverage the power of business intelligence and analytics, tools and systems are becoming easier to use and more real-time. Rita Sallam, research vp at Gartner, explained, “The BI&A market is in the final stages of a multiyear shift from IT-led, system-of-record reporting to pervasive, business-led, self-service analytics.” Once BI tools don’t require programming skills or a degree in statistics, their mainstreaming is practically guaranteed because they can add dollars to the bottom line.

One startup that’s taking this new approach is Anodot. I first heard of the firm in September (when it announced its most recent funding round), and I assumed the company was in cybersecurity because it does something it calls anomaly detection. But after speaking to David Drai, cofounder and CEO of the Israeli startup, it became much clearer that the company’s technology addresses big pain points in fintech.

Anodot’s machine learning looks at different buckets of data in an organization to establish a view of what normal looks like. So, if you’re processing credit cards, for example, Anodot examines approval rates across geographies to develop a model for what defines business as usual. Any deviation from the norm triggers alerts to relevant departments. The technology correlates abnormalities in the data to external events, like a new product launch, to see what’s causing them.

There’s no need to write hundreds of queries. “Our machine learning does this all for you,” said Drai, who previously cofounded Cotendo, which was bought by Akamai in 2011 for $268 million. “Anodot can answer two important questions for you: what’s happening and why.”

Credit Karma came to Anodot in 2016 with a specific problem. The company relies upon numerous funnels to ensure prospects and existing clients most efficiently interact with the firm’s credit scoring and monitoring service. All of a sudden, the revenue driven by a certain webpage dropped by over 50 percent over a three day period before the company could determine what was causing the problem.

“To test Anodot, we streamed a subset of six months of historical data to see if Anodot would find the same anomalies we had found manually, and it did,” said Pedro Silva, a senior product manager at Credit Karma. “It was clear very quickly that Anodot provides a ton of value to both business and technical teams.” After working with Anodot, Credit Karma quit further development of its own in-house solution to eliminate business incident detection latency.

Riskified is another fintech firm that uses Anodot’s real-time business dashboards. The company works with large retailers to prevent ecommerce fraud with instant approvals and full chargeback protection. Because it assumes the approval risk from its merchants, a break down in its risk models can be disastrous. The company looked to outside vendors for assistance.

“We think that someone focused on something specific will almost always do it better than generalists,” said Assaf Feldman, Riskified’s CTO. “Our customers know ecommerce really well but they turn to us for state of the art fraud protection. We’re all willing to pay for specialization.”

Tel Aviv-based Riskified uses Anodot to monitor internal signals of its fraud models and to make sure service levels are maintained for the product. The system’s alerts notify account managers if there are problems.

As Riskified looks to broaden its usage of Anodot across the company, fintech firms are taking a hard look at using new business intelligence and analytics tools in 2017.

 

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Hi 5! The top five fintech stories we’re following today

top 5 weekly fintech stories

Customers dig the new Bank of Hawaii branch design

You’d think a bank branch of tomorrow would be focused on all sorts of futuristic fintech. Bank of Hawaii’s new branches keep customers firmly in the center. With little visible tech, tellers also make their way out of hiding.

U.S. Bank’s approach to social intelligence

U.S. Bank has created a continuous marketing feedback loop. Whether it’s stadium sponsorships like the bank did with the Minnesota Vikings or an awareness campaign on Twitter, the firm turns big data into actionable insights to be used across the organization.

Inside MassMutual’s fintech startup, Haven Life

U.S. insurers, many of whom are over 100 years old, are trying to figure this whole innovation thing out. MassMutual has developed a couple of new online brands, including an in-house startup. Tradestreaming talks with Haven Life’s CEO about the future of insurtech.

Are there real world blockchain applications yet?

Blockchain technology is still too immature to go to market for many use cases. In this week’s podcast, ACI’s head of digital banking solutions names a few areas he sees more ready for primetime.

Mobile payments year in review

It’s been an up and down year for mobile payments. Consortia were formed and disbanded, former enemies came together, and mobile wallets at the POS are still stuck in neutral. Here are the best and worst moments for mobile payments during 2016.

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‘Customers love the new fresh look’: Bank of Hawaii pursues a better UX with its Branch of Tomorrow

Earlier this year, Joe Salesky suggested that the physical structure of the teller-customer relationship was long overdue a makeover. “At the Apple Store, no one sits across the counter from you. They sit side by side,” the CEO of CRMNEXT noted. “Anybody at the Apple Store can tell you about any product, it always feels very collaborative, and you’re really not hurried in or hurried out.”

Bank of Hawaii seems to grasped this change in customer experience preferences. On November 12, 2016, the bank launched its Branch(es) of Tomorrow, which has basically done away with the great teller/customer divide.

“From a customer experience standpoint, there was a desire to create an open and welcoming space like you would see in a hospitality or retail setting,  yet also providing for privacy for conversations when necessary,” said Kevin Sakamoto, senior evp for branch delivery at Bank of Hawaii. Sakamoto said customers “love” having the employees out in front instead of trapped behind their desks.

Somewhat surprisingly, fintech isn’t a goal so much as a means at these new branches. Instead, the Branch of Tomorrow is built around three customer elements: Connecting with customers and understanding their needs, educating and empowering customers to take advantage of new banking conveniences, and personalizing financial solutions to give customers financial peace of mind.

Technology, in the form of WiFi, tablets, and digital marketing, does come into play in the branch’s daily operations. The bank also has plans to expand its online and mobile offerings, and to move towards a paperless workflow environment.

However, what actually played a larger role in designing the branch wasn’t technology — it was localization. Each Branch of Tomorrow has local branch elements, such as employee name tags with their hometown and a unique, proprietary scent that welcomes customers upon entering the branch.

“A key objective at the start of the project was to have a branch experience that is ‘of Hawaii,’” explained Sakamoto. “The branding elements tell a local story and we consciously incorporated facets unique to the market including the map and art work.”

Localization, combined with moving the tellers out of hiding and making technology more ubiquitous, has made a real impact on the levels of customer engagement BoH is able to provide. According to Sakamoto, customers are really excited about this new breed of branch. With more tech titans like Google, Facebook, and Amazon eyeing financial services, we’ll likely see more tellers moving into the light, armed with technology and inviting premises.

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Least viable fintech segments are most optimistic

Entrepreneurs are optimistic by nature. They have to be. When pitching VC’s or talking to the media, the potential of one’s solution is always in the forefront. The risk, go to market strategies, and costs of user acquisition usually do not make it to the soundbite.

But a good entrepreneur knows how to be cautious. It seems that fintech entrepreneurs suffers from over optimism.

Almost 250 European fintech companies were asked recently by consulting firm Roland Berger which segment of the industry they believe is most likely to grow in revenue by 2020. Ironically, fintech firms that operate in crowdfunding, lending, and cryptocurrency or blockchain segments made the most optimistic projections about revenue growth.

screenshot-www-rolandberger-com-2016-11-28-15-21-20

Why ironically? Because 2016 was a horrible year for marketplace lending. 2016 saw a funding crunch, higher delinquencies, huge operational losses and declining originations. The fact that marketplace lender Zopa recently applied to become a bank highlights the weakness of the business model.

Let’s not even go there on blockchain. Though big banks are experimenting and testing various application of private blockchains, no solution has passed the proof of concept stage yet. Wide adoption and profitability are way, way away. It’s not just a technological issue — it’s a business model issue. Who exactly is going to profit from blockchain technology? Blockchain vendors maybe? Perhaps the banks will choose to build and maintain the technology in-house?

The truth is that nobody knows how financial services will use blockchain technology, if at all, let alone estimate its revenue growth.

Another interesting point this survey makes is the complete disregard for regulation, an element so central to financial services. Regulatory know-how was ranked among the five most important factors by only 27 percent of respondents. Flipping that: 73 percent of fintech entrepreneurs underestimate the role of regulation in financial services.

Come on people. This is not how you disrupt an industry.

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Who’s eating your lunch? It’s not fintech firms that banks should be worried about

When we discuss the changing landscape of the financial industry, we generally settle into the narrative of us versus them. Of old, stodgy financial incumbents versus the young, fintech upstarts. But Caribou Honig, founding partner of QED Investors, thinks we need to rewrite that script.

Addressing the crowd last week at the Tradestreaming Money Conference, the venture investor encouraged industry professionals to pay more attention to the positioning of technology firms like Facebook, Amazon, PayPal, and Google as they move deeper into financial services.

 

technology firms at Money 2020

 

To prove his point, Honig analyzed attendance rates at this year’s Money 20/20 conference in Las Vegas. Held in late October, this event attracts over ten thousand attendees from all over the world interested in the intersection of technology and finance. This year was no exception, but when you drill down to see who actually walked the floor of the Venetian, it turns out that the technology firms outnumbered staple brands, like Equifax, JPMorgan, Synchrony, and Bank of America.

So, why are technology firms eyeing financial services? Honig suggested four possible reasons. The first is that they operate at gigascale. Having a franchise of 1 billion consumers is table stakes for firms like Google and Facebook. Next, they really get the mobile experience. For firms like Alibaba and Amazon, the smartphone is core to their DNA and strategy. Tech companies also produce a huge data wake, providing richer, more universal data sets. These companies know a ton about their users and have the cutting edge analytics to make actionable insights. Lastly, tech firms have the right mindset to compete in today’s financial services industry.

“Technology firms have learned to ask ‘what’s possible?’ rather than respond ‘we haven’t done it that way before,” he said.

why technology firms are interested in finance

If Honig is right, then that means the industry needs to start paying more attention to the threat that technology firms represent. Incumbents should be closely studying what these firms are doing. By pointing to other industries impacted by the deflationary pressure of technology, Honigh predicts that existing revenue pools will decline as costs fall. This creative destruction creates an opportunity for the largest players.

Honig, who’s invested in high flying fintech firms like Avant, GreenSky, and Credit Karma, thinks startups represent a petri dish for experimentation and a lifeline for large banks. Incumbents should monitor the scrappy group for good ideas. It’s ultimately the pairing of the startups and incumbents, however, that can light the path forward for the industry.

“Incumbents can, and should, collaborate with the fintech startups to counter the looming threat posed by Tech Titans,” he said.

 

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9 fintech CEOs share the best and worst parts about being a leader

The CEO crown seems very alluring, but it may not be all that it’s cracked up to be. Sure there are benefits, prestige, and money, but what about all the things that aren’t spoken about, like the long hours, time away from family, and stress over making payroll?

We spoke to 9 fintech CEOs and founders, asking them what the best…and worst parts of the job are.

Nav Athwal, CEO, RealtyShares:

Best: The customer feedback, getting validation that what you’re building is something that gets them excited. Hearing things like ‘I love what you did,’ ‘it changed the way I think,’ and ‘it’s the best thing since sliced bread’.

Worst: Raising money is a necessary evil and not my favorite part of the job. You have to tell the story to skeptic VCs who have to pick the best company for their investment. It’s not the most exciting part since you’re so far way from the product, but it’s important for growth.

Brian Zanghi, CEO, Masabi:

Best: Working with a team of people and turning something that seems impossible today into something real. Especially when it delivers rewards to those with high career aspirations, it’s something that feels great.

Worst: I’ve learnt over the years that things take longer and cost more. You have to be comfortable losing money at early stages of a business. Understanding that is half the battle, and the other half is working with investors, who don’t always agree with a CEO’s perspective.

Cyril Chiche, CEO, Lydia:

Best: Changing the way people live their lives as a company. If you do it by yourself, it’s great. But if you have a great team that are passionate, rigorous, and devoted to change, it feels super cool to make a change together.

Worst: All the hours, days, weeks, months that I haven’t seen my kids grow up. My wife jokes around to our friends and at dinner parties that Lydia, the name of our company, is a very demanding mistress.

Derek Webster, CEO, CardFlight:

Two things are hardest. First is the constant switching of roles. First I have an interview, then a sales call, then prep for a board meeting, then contract negotiations, followed up with closing a customer and a meeting with engineering. I love bouncing around, but it’s also hard. Rarely is there a time where I have nothing to think about.

The other part is building a product and team, raising money, and getting customers. You can’t do one thing without the other two. Most entrepreneurs fail because they can’t accomplish this impossible goal. The art is somehow figuring out how to do it makes a successful entrepreneur.

Scott Galit, CEO, Payoneer

Best: All the great people I get to work with and support. We have a unique business since we have a global team and I get to work with so many people, and I get to see how people from different backgrounds are similar. Dealing with people from all over the world and finding the commonality and the humanity in all of it is a great feeling.

Worst: There’s nothing I hate, but it’s hard to keep a growing company aligned and sharing the same vision and sense of purpose. Continuing to scale and keeping the heart and soul the same and not losing our identity is no easy task.

Tom Burgess, CEO, Linkable Networks

Best: I’ve done this four times in 20 years, and somehow I keep coming back. The best part is giving your employees and investors success. Making calls for higher salaries, options, or a more fun place to work is the best part of it all.

Worst: You create a company with a ton of potential and sell it, but the potential that you won’t deliver is on your shoulders. It’s an addiction. Once you do it once, you keep going for it again. Feeling that delivery is crazy good and you keep fighting to do it again, but it weighs on you.

Evan Gentry, CEO, Money 360

Best: Being a part of creating something that’s awesome, creating a team and having the control in your hands is the best. Providing opportunities for loans, investments, and jobs for lots of people all at once are some examples of why it’s so great.

Worst: Harder on yourself than a boss, I’m driven to be successful, but you have to do things the right way and be disciplined. You also take it home with you, it’s part of who you are, you don’t punch a clock.

Gino Zahnd, CEO, Cozy

Best: I wake up everyday with no idea how to get the next thing done, and I love that about my job. It challenges me to be better and constantly learn.

Worst: It’s tough being OK with not moving as fast as you have in your mind. We move at a rapid pace, and it’s still slower than my vision. You have to remain patient even though you want to move faster.

Philippe Gelis, CEO at Kantox

The hardest part of running a company is coping with regulation, especially when dealing with a multinational company. Having a great idea is one thing, but trying to fit them into regulations is another.

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4 charts on the stickiness of traditional banks

Banks and financial institutions are often warned that they are ill equipped to deal with the wave of fintech and new challengers. Since calling BS on popular opinions seems to be my forte, I’ll go ahead and challenge this one as well.  

The recently published World Fintech Report 2017 by Capgemini, LinkedIn and Efma continues this tradition with chapter titles such as “In face of fintechs, traditional firms struggling to apply innovation”. But a closer look at the data shows the picture is actually not that black and white.

One of the main instruments of fear is the claim that millennials are not as loyal to financial institutions. This point has been shown in multiple surveys and articles (examples here and here ). Multiple studies claim between 40 percent to 50 percent of bank customers are ready to switch. 

World Fintech Report had its own take on loyalty with this chart:

screenshot-www-capgemini-com-2016-11-07-11-46-18

Look closely at the right column: only three percent of respondents claim to have forsaken traditional banking firms all together. Is this really a cause for panic?

“Wait,” one might say. “Even if customers stay with incumbents, traditional banks still need to compete with each other using advanced user experiences, artificial intelligence and other buzzwords.”

However, it seems that even for tech savvy millennials, such offerings play a very small role when choosing a new bank. This is from a report on the banking habits of professional millennials by financial marketing agency Bank Clarity:

screenshot-www-bankmarketingclarity-com-2016-11-07-12-02-43

Good tech-based solutions are only number 6 on this list.  

It is important to note that reasons for choosing a bank and reasons for leaving a bank are different. Most people who switch banks do so for reasons that are out of the bank’s control: relocating, changes to marital status and the like. Unprompted by major life changes, most people just stay put. Over 60 percent of professional millennials still bank where they did in college. Out of those, about 60 percent still bank where their parents did.

60 percent seems to be a magic number. An EY report shows that just under 60 percent of Americans trust their banks to keep their money safe. Americans trust their banks less when it comes to other aspects but that doesn’t seem to matter much. For most people, banks do what they need to do well enough: keep people’s money. So they stay.

screenshot-www-ey-com-2016-11-07-13-04-30

Banks and fintechs are playing a different game. As shown in this chart from World Fintech Report, while banks excel in trust related issues, fintechs excel in customer experience and ease of use.

screenshot-www-capgemini-com-2016-11-06-21-32-44

The sad news for fintechs: customers do not switch financial institutions because of those features.