While the world — and the economy — was in gridlock as a result of the coronavirus pandemic, innovation in financial services technology continued on unabated. Arguably, it got even more creative, adaptable and intelligent than it was before.
These industry changes are now allowing companies to serve their customers in novel and unexpected ways. From advancements in digital-only banking to delivery platforms, automation and more, 2020 helped shape the next wave of innovation in tech.
“In the not-too-distant future, we believe that merchants will get all of their payments and financial services exclusively through SaaS platforms,” Jareau Wadé, chief growth officer at Finix, told Built In.
Wadé and two additional, local fintech leaders shared the ways last year’s events accelerated industry trends and how they’ll continue to drive innovation in the future.
To meet the needs of the changing financial market, Addepar doubled down on its platform’s scale and performance over the last year. Chief Product Officer Don Nilsson said that they also developed a suite of new metrics that better enables users to measure risk exposure within their portfolios.
What changed for your business in 2020, and how much of that was driven by the pandemic and associated impacts on consumer behavior?
Last year was obviously unprecedented. Out of necessity, the digital transformation that was well underway pre-pandemic in the wealth industry greatly accelerated when in-person advisor-investor contact was suspended. Addepar is designed for registered investment advisors (RIAs)6 and other wealth managers to analyze the performance of client portfolios, engage and communicate, and help clients attain their financial goals.
This became even more critical in the face of 2020’s historic market volatility. The numbers bear it out. Active advisors were up 50 percent over the last 12 months on our platform. Monthly analysis views have increased five times to over one million per month. Reports that our clients run and share with investors — as well as investors’ use of our portal and mobile apps — more than doubled during the last year. None of this is terribly surprising. A younger, more tech-savvy generation of clients has shown a growing preference for technology-based self-service experiences.
We’ve developed Addepar as an open platform, and this will continue to drive innovation.”
How did you adapt your product to address these shifting trends?
Addepar is a cloud-based web application, so the sudden shift to work from home in 2020 was seamless for our users. We did, however, increase our investment in our portal and mobile applications, converging them for a more unified client experience. This included a highly responsive and adaptive portal application to support the various devices and form factors used by end investors. We also made enhancements to ensure any portal view can be accessed in the mobile app.
We’ve long invested in our platform’s scale and performance. So in 2020, we doubled down on this, given the sharp increase in users and usage. This resulted in improved system performance and enabled us to easily adjust to the increased demand. With the growing emphasis on risk analysis and measurement, we developed a suite of new metrics that enable our users to better measure risk exposure in their portfolios. Lastly, the shift to a work-from-home environment fueled an expanding need for custom solutions. In response we released our developer platform, which has seen high levels of adoption, as well as powerful new APIs that allow clients to tap into the full power of our data platform and calculation engine.
Looking ahead, what lasting effects do you think 2020 will have on your business and industry? And how do you plan to be part of this next wave of fintech innovation?
The pandemic will certainly have a far-reaching impact on the wealth management industry and on Addepar. The associated market volatility rewrote the narrative around robo-advisors and the DIY approach. This should create strong tailwinds for the industry for years to come.
We currently serve more than 600 of the leading RIAs, family offices and banks. Our clients rely on us for data aggregation, analytics, reporting and client communication tools. We will continue to invest heavily in these core strengths, but that’s just the beginning. We’ve developed Addepar as an open platform, and this will continue to drive innovation. We aren’t trying to be an all-in-one solution provider. Our clients want best-of-breed solutions that connect seamlessly. There are many creative ideas that can be unlocked through an open platform with a powerful suite of APIs sitting atop our calculation engine and data platform.
Because many of its customers were unable to offer dine-in services for the majority of 2020, Clover Network created an online ordering platform that fully integrates with its POS devices, free of charge. Pahade said that the platform was designed to save merchants money and be operable within 10 minutes of activation.
What changed for your business in 2020, and how much of that was driven by the pandemic and the impacts on consumer behavior?
As a result of the COVID-19 lockdown, a large part of Clover’s core customer base was unable to offer dine-in services for their customers. Many of these merchants did not have an online presence since it wasn’t absolutely necessary pre-pandemic. If they did have a relationship with the larger online food ordering providers such as Grubhub or DoorDash, they were getting charged a lot of transaction fees. Customers were requesting to order takeout at a much larger scale than ever before so merchants with no online presence were losing potential customers if they couldn’t get them on the phone to place an order.
We’re developing more features that will support merchants with creating touchless experiences.”
How did you adapt your product to address these shifting trends?
We created the Clover online ordering platform, fully integrated with our POS devices free of charge. The goal was to provide Clover merchants with an online presence and the ability for their customers to seamlessly place orders and make payments online without other third-party providers. This would save merchants money and allow them to take multiple orders at once while prioritizing everyone’s safety. We designed it so that it was easy for merchants to sign up and be ready to accept online orders within 10 minutes of activation. Upon setup, merchants are given the ability to establish their online service hours and estimated food preparation times so that their customers know when to expect their food to be ready. With this feature, customers were then able to peruse menu options and customize their orders at their own pace all within an app or web ordering page and then opt for curbside pickup or delivery, keeping physical contact to a minimum.
Looking ahead, what lasting effects do you think 2020 will have on your business and industry? And how do you plan to be part of this next wave of fintech innovation?
We’ve noticed a couple of trends that are here to stay, such as online ordering and ordering ahead. Consumers’ sense of cleanliness has also permanently changed, and they will continue to expect a guarantee of sanitation from businesses.
With that in mind, we’re in the process of developing more features that will support merchants with creating touchless experiences for how their customers pay, order food and maintain social distancing. While we can’t elaborate too much on the details of what this will look like yet, our goal is to continue helping our merchants increase foot traffic while decreasing transaction fees.
Because more and more companies were seeking online payment systems as a result of the coronavirus pandemic in 2020, Finix launched a new program that allows customers to start accepting payments immediately. Wadé said that Finix took care of the compliance work and technology integrations at the start, and then transitioned the responsibility to customers over time.
What changed for your business in 2020, and how much of that was driven by the pandemic and the impacts on consumer behavior?
Before the pandemic, we spoke to CEOs from every industry who recognized the financial benefits of embedded payments. I think the user experience benefits of embedded payments became clearer as it became more personal for these CEOs. The pandemic changed everything about how we live our daily lives — the way we work, shop, communicate, etc. For example, pre-pandemic, contactless payments were a nice-to-have. Now, we proactively seek out that functionality in stores. Previously, I didn’t care if a coffee shop had curbside pick up via a mobile app. Now, we’re all making purchasing decisions based on how payments are accepted. That’s a big change!
At Finix, our business grew by 300 percent in 2020 as our customers shifted their businesses fully online. And now, nearly halfway through 2021, we’re seeing that this behavior change is here to stay. As the U.S. reopens, payments are remaining digital and we’re seeing SaaS platforms — even those in industries often viewed as late technology adopters like government or education — thinking creatively about how they implement payments and other financial services directly into their business models for the benefit of customers.
SaaS companies are creating better customer experiences by adding payments to their core offering.”
How did you adapt your product to address these shifting trends?
When we started Finix, we falsely assumed that companies needed to reach a certain size before building their own payments stack. However, during the pandemic, companies saw how the flexibility of payments ownership allowed them to quickly meet customers’ needs. For example, we helped one customer launch an online gift card tool for small businesses in a matter of days so owners could earn money when non-essential businesses had to close down. We also helped another customer build a Venmo-like experience for cash-only merchants, like mom-and-pop grocers, to accept digital payments and keep their doors open.
This flexibility, in part, spurred the number of SaaS companies seeking to incorporate a payments strategy into their business from day one versus starting with a third party where they had no control over the customer experience. In response, we launched a new program that allows customers to start accepting payments immediately with Finix taking care of the compliance work and technology integrations at the start, and then transitioning responsibility to the customers over time.
Looking ahead, what lasting effects do you think 2020 will have on your business and industry? And how do you plan to be part of this next wave of fintech innovation?
SaaS companies are creating better customer experiences and products — and increasing their revenue — by adding payments to their core offering. This trend will follow suit for all financial services. In the not-too-distant future, we believe that merchants will get all of their payments and financial services exclusively through SaaS platforms.
The total addressable market for payments is $3 trillion going on $4 trillion. There is room for plenty of SaaS-turned-financial service providers. At the least, there will be 10 $100 billion plus payments companies in the future. One will be Finix, and we estimate another five will be built on Finix.
