As technology redefines banking and finance, we believe real relationships matter more than ever. People’s preferences for how they save and exchange money are changing, but when it comes to building a business, the value of partners who are accessible, insightful, and experienced never will.
Fundamental Financial exists to empower entrepreneurs with individualized growth capital solutions built on trust.
As the ways we deal with money become more futuristic, we think many tech advances are worth embracing while others are passing trends. New online banks and lenders have emerged as traditional institutions compete by deploying new digital tools. Our view:
Technology is great for making life more convenient, but it’s no substitute for trust. Nuanced knowledge for financing dynamic small businesses and navigating the uncertainties of entrepreneurship can’t be digitized.
For simple checking and savings accounts, however, more people are choosing mobile app solutions over bank branches and robo-advice over tellers, according to a 2016 Accenture report. “Nearly one-half (46 percent) of bank customers are open to using robo-advice for banking services: computer-generated advice and services, independent of a human advisor,” the report found. “Speed and convenience (50 percent) and lower costs (29 percent) were cited by respondents as the primary benefits of robo-advice, with millennials and affluent consumers expressing the most interest in the service.”
Banks claim that by automating advice and offering app features like mobile deposits and cash transfers, they can pass along savings to customers instead of investing in branches. While that may be true, and while some online-only banks have stuck around, we’ve noticed that their appeal has fizzled. So even as people grow more willing to adopt digital banking tools and demand for brick and mortar branches fades, institutions with real people and real relationships still dominate.
And even as established banks offer more handy digital features, security breaches are an ever-present threat to any online transaction. “Although mobile-savvy customers want ubiquitous access, banks have struggled to provide pure-mobile services due to challenges related to security, providing always-on connectivity and replicating the in-branch experience,” Sean Bowen, CEO of app developer Push Technology said in a CNBC piece.
What about lenders? A previous Fundamental Insights blog ‘Who’s Afraid of Fintech?’ took a closer look at financial technology startups offering online lending. We noted that in their haste to grow, some players exploited the lack of focused oversight in this new space by making risky and even unethical moves, which has led to fears that a big debacle or data breach could destabilize the entire lending industry. On the digital frontier, uncertainties abound.
In the end, we feel the same way about embracing advancements in personal banking as we do about fintech in general: You can tap technology to make life simpler, but you can’t automate integrity. Our experience, insights, and stability give our clients the advantage.
At Fundamental, our working capital solutions are built on real relationships that prioritize transparency, mutual understanding, and trust. Contact us when you or your clients need a growth capital partner who’s both forward looking and firmly established.