Are you a credit union or community bank looking to implement a small account digital wealth management solution? Here's what to look for in a vendor.
Community FI's have been slow to adopt investment solutions for small accounts despite the massive growth in self directed investing and the success of Robinhood Wealthfront Cash App as well as Big Brand Banks.
One reason is the lack of credible vendors and the risk of working with Fintech startups. Here is what to look for:
- Funding Stage and Risk
Innovation has disproportionately been driven by Fintech startups. They have VC money, technical capabilities and a thirst for innovation and experimentation that is unmatched. They come however with risk - when the macro market changes or the money runs out they have to raise money to stay alive, not all make it.
- Product and feature breadth
Alternative fintech investment apps emerged in the early 2010's focussed on specific niches - self directed investing of fractional stocks, robo investing, alternative assets. Since then they have expanded their products across investing and banking. If your vendor only offers Robo or self directed investing you are already stuck in the past.
- Regulation, compliance and risk
Fast and loose with regulation and compliance is not an option. Fintech founders can be a diverse group many highly experienced in tech and startups but far fewer with directed experience in regulated marketing and financial services. You need both.
- Economics - if the vendor does not share customer generated revenue with you - why not? sharing the upside and participation in the value created is critical to establishing a long term sustainable (and profitable) new business line.
- Established reference clients
Especially challenging in a nascent market - chicken and egg problem. The ability to support employee pilots/proof of concepts as a way to overcome the natural fear of being first should always be offered.
- Flexibility and customization
Does your company own a traditional wealth management business and you want to use their proprietary models for Robo or deliver your own focussed strategic portfolios? Crypto too spicy for your Board currently? No problem. Your vendor should be able to work with whatever assets and capabilities you have not force a one size fits all approach.
- Customer audience
Consumers OR SMB's? Consumers AND SMB's? All your customers can benefit from accessing an enhanced group of services and features. Serve all your customers with an embedded investment platform whatever their needs.
Unifimoney is a turnkey digital wealth management platform enabling Community Financial Institutions to compete with Fintechs and Big Brand Banks at high speed, low cost and without the need for technical integration. Owned by Palm Ventures a large family office backed investment firm. If you would like to speak to us please reach out or visit the website.
