Traditional financial services companies have something new to worry about: FinTech is increasingly encroaching on their turf and winning the hearts and minds of consumers.
According to a report, a new survey by early-stage venture capital firm Blumberg Capital found three in five Americans say banks aren’t doing a good job of keeping up with their needs. Blumberg, which has invested in Able Lending, Addepar, Lendio, Fundbox, FeeX, EarnUp and CoverHound, found 57 percent of Americans think traditional financial services companies won’t remain as they are today within their lifetime.
What’s more, according to the survey, 75 percent of survey respondents said FinTech gives them more power and control of their finances, while 65 percent said FinTech gives them access to financial tools that were previously reserved for the wealthy. Of the survey respondents, 69 percent said FinTechs help everyone to improve their financial state.
“Most people feel that FinTech is a good thing for consumers and for small businesses, that it will help make things more efficient, give them more information, more transparency, more automation of things that should be automated,” said David Blumberg, founder and managing partner, in the report. “An example would be: You never want to miss a mortgage payment. There should be a system for this — an automated system that automatically pays down your debt. And not only is it automated and straightforward, but it’s smarter, so it knows when you should make an extra payment to reduce your total interest paid. It acts like a watchdog that watches the banks so that, if you make an extra payment, they properly credit you with paying down principal first and not just telling you you made two interest payments in advance.”