Where Is Fintech's Killer App?

At this point, there are literally hundreds of FinTech companies out there, vying for my access to by bank accounts and my assets. I'm an early adopter type, and I"m particularly interested in the intersection of tech and finance. But here's the thing - while I'm excited about the innovation in the space, I'm using very little of it - I just can't seem to find a value prop that's strong enough to get me to change my behavior. I haven't found my killer fintech app. And I've been looking.

It's not that I feel my current systems don't have weaknesses - in fact, I'm constantly frustrated by the difficulty of doing what I consider relatively simple tasks, from true-ing up monthly expenses to rolling over 401k's to aggregating stock picks from a variety of different sources. And while there are some viable fintech alternatives to the legacy systems, I've yet to find any that are truly transforming my experience.1

Expense Tracking

Fifteen years after Mint's launch, I'm still looking for a personal expense tracking tool that functions as well as my spreadsheet-driven system. My most recent trial is Personal Capital - and while I find that it does a better job with many things than others I've tried, I'm not getting much from using it - it seems there's always some piece of data that's missing, mis-categorized, or otherwise invalid, making the complete picture I'm getting not quite accurate, rendering the picture itself pretty useless.

What my killer app might look like: something that tells me in real time what's going on with my spending without being obnoxious, something that can differentiate "outlier" purchases from normal monthly expenses/patterns, something that helps me understand the real life implications of my behavior. It's a complicated ask, but one I think is within technology's grasp.

Investing

We look immediately to Wealthfront and Betterment here as the leaders in the "robo-advisor" space, but we'll soon see nearly every major banking institution roll out their own version of the same technology. These offerings are likely to make the role of the traditional financial advisor obselete (at least for all but the top 1% of investors), but there's nothing really magical about them. I could easily build the same ETF portfolio in my brokerage account in about ten minutes, set up automatic investments, and be done with it. I'll concede that this action isn't obvious and easy to everyone, and that these robo-advisors greatly simplify the process. They even throw in a few bells and whistles like tax-loss harvesting that are not snap-your-fingers easy to do. But they're not fundamentally changing the game.

What my killer app might look like: a way to invest that is uniquely tailored to my needs, inlcuding my need for (the illusion of) control. Something that will give me an easy way to dial up or down risk in the portfolio, something that will provide guidance on when to increase/decrease positions according to pre-defined plans. I'm aware that most research points to the fact that passive strategies outperform active ones, but I still think we can do better than giving every single investor the same mix of 7 or 8 ETFs and calling it a day.

Trading

Trading is a mildly lucrative hobby for me at this point - but something I spend a fair amount of my time on. I've developed a whole bunch of routines, most of which could be fully automated. I've started building some software to help my own process, but maintaining it and continuing my own development is more time consuming than it's worth at this point. I've started to play around with algo trading on Qunatopian (ridiculously smart company/concept) and that is definitely a step-change from what's previously been available. But as far as the average (read:non-developer) trader is concerned, there's not a ton of technology out there that's truly transformning the game. Simple problems like position sizing, screener management, and effective note-taking haven't been solved, making it difficult and onerous for many traders to track, manage and execute on potential trades.

What my killer app might look like: an app that can help aggregate all my sources of ideas into one place, help me quickly evaluate them and store my evaluations for later, and that ultimately learns from my decisions as I go, eventually presenting ideas to me based on my past behavior and the available data signals. Think super-smart Tinder for stocks.

I think fintech is maybe the most interesting space out there right now, and I'm pumped about all the innovation that's happened so far. But I've not yet found my killer app. Maybe you're building it right now.


Notes

  1. I do believe fintech to be truly disruptive; it's causing a massive industry to rethink its practices and forcing innovation. This is a good thing. What I am saying is that to the consumer, these are only new ways of doing the same things - mostly replacing a human interface with a technological one.