[alert type=yellow ]Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s newsletters .[/alert]
1. What’s the fuss about LendingClub?
The largest U.S. marketplace lender is in a whole lot of trouble. It’s unclear whether LendingClub’s current financial troubles are a result of the shady dealings of its (now ex-) CEO Renaud Laplanche or whether it’s a broader company issue. Either way, it’s a big deal. Here’s why.
2. How DailyWorth turned a newsletter into a roboadvisor for women
It’s a good time to be a woman investor. At DailyWorth, founder and CEO Amanda Steinberg is using the data amassed from her 7 year relationship with her 1 million newsletter subscribers to develop a roboadvisor to help women become smarter investors. DailyWorth’s wraparound roboadvisor service, which provides financial education, guidance, encouragement, and even some humor, is just one in a series of new fintech initiatives to empower women. To get your full girl power fix, read on about SHE: The ETF that trades on Female Empowerment, and Ellevest, Sallie Krawcheck’s new digital investment platform that wants to change how women manage their investment strategies.
3. Big banks stake fintech claims with patent application surge
Big banks are getting into the fintech frenzy by … filing patent applications. The prominent financial institutions are firing off patent applications on technology that has already been integrated into existing products, speculative products, and up and coming key technologies. Just how many patents are we talking about? Since 2013, big banks have filed a whopping 2,679 patents (at least!) in hot areas such as blockchain, analytics and cybersecurity, a surge of 83% from the prior three years. These patents, when granted, would allow big banks to protect their innovation investments. However, this tactic comes with a price. Many of the technologies that big banks are trying to patent are network-effect technology; the more walls big banks erect, the less these technologies are able to grow.
4. How Charles Schwab fought back against roboadvisors
In June 2014, roboadvisors and the startups launching them were looming large on the investment horizon. Instead of hiding its head in the sand, Charles Schwab decided to embrace this new technology by creating its own roboadvisor service, Schwab Intelligence Portfolios, within the year. Here’s how Schwab did it. By using questionnaires to gauge clients’ investment goals, risk comfort, and a number of other factors, Schwab Intelligence Portfolios matches clients with investment portfolios tailored to their individual investment profile. However, according to Michael Kitces, Schwab may have to make some adjustments to the service fairly soon, in order to comply with the upcoming DoL fiduciary rule.
5. Why it’ll be Visa and MasterCard – not tech start-ups – that truly disrupt banking
Credit cards hardly seem disruptive – maybe because they’ve been around since the Roaring Twenties. Nevertheless, Alexander Vityaz argues (persuasively, we think) that credit card companies are already leading a quiet revolution in the finance industry. Thanks to their global, digitalized presence, Visa and MasterCard are slowly transforming into banking corporations, leaving banks acting like subsidiaries of the credit card companies. At the end of this process, Vityaz sees banks becoming faceless utility providers, much like your electric or gas company.