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fintech report card

July 2017 Fintech Report Card: Top Nine Tech Events

Welcome to the July edition of the Riskalyze Fintech Review, where Riskalyze CEO Aaron Klein gives you the thumbs-up or thumbs-down on the biggest pieces of news to hit advisor technology in the last month.

Welcome to the July edition of the Riskalyze Fintech Review, where Riskalyze CEO Aaron Klein gives you the thumbs-up or thumbs-down on the biggest pieces of news to hit advisor technology in the last month. Regardless of your Risk Number, failing to read this piece may be the riskiest move of all!

eMoney Launches Lead Capture – 

What happened: eMoney announced Lead Capture, a tool for financial advisors to attract and qualify leads through their online marketing efforts. Lead Capture lets advisors generate a unique link that can be added to emails, social media posts and websites. Once clicked, the link directs to a customized web page where prospective clients can enter basic financial information. The tool is fully integrated into eMoney's platform and available to all users at no added cost.

Why it matters: Marketing can be intimidating, especially if it’s not one’s area of expertise. For advisors who want to be able to attract and capitalize on leads, Lead Capture could be another great way to automate these efforts. We can’t wait to see how advisors use this.

Bitcoin Code Update Could Make New Coin Invalid –

Why it matters: The community-driven organization overseeing Bitcoin warned that any Bitcoins received after Monday, July 31, 2017, may vanish into thin air or be rejected as invalid due to a "potential network disruption." Bitcoin Improvement Proposal 148 (BIP 148) is an effort to implement a code revision referred to as a Segregated Witness, or SegWit, a method for separating signature data from transaction-identifier data in a Bitcoin transaction. The SegWit operation depends on the consensus of Bitcoin miners. If most Bitcoin miners signal their support through their mining activity, the change should become active across all compatible Bitcoin clients. But if BIP 148 is only embraced by a minority, the blockchain could split. That would create a situation in which BIP 148 Bitcoins and legacy Bitcoins would be incompatible.

Why it matters: The intricacies of Bitcoin are complicated, but instability seems to be an overarching trend—it all seems especially volatile, doesn’t it? Using the blockchain technology for settlement of transactions seems like an incredible application of the concept, but it remains to be seen if the cryptocurrency part of this phenomenon blocks progress.

Betterment Introduces Socially Responsible Investing –

What happened: Betterment announced their socially responsible investing (SRI) portfolio. The SRI approach includes reducing exposure to companies that are deemed to have a negative social impact—such as companies that profit from poor labor practices or environmental devastation—while increasing investment in companies that have a positive social good—like companies that foster inclusive workplaces or work toward environmental sustainability. Alex Benke, CFP® and VP of financial advice and investing at Betterment, says they’re "offering portfolio options that help customers align our advice to their personal values."

Why it matters: On the one hand, I like investing in your values. For the part of my own portfolio where I own stocks, I invest in companies with insanely great customer service.

On the other hand, I’d love to see Betterment use their tech scale to personalize this kind of product, and recognize that values are not one-size-fits-all. Instead of dictating to investors what “socially responsible” means, why not let individual investors choose what fits their values and what does not?

TCA Integrates With RightCapital for Improved Plan Options –

What happened:  Custodian Trust Company of America (TCA) announced a full integration with RightCapital, a comprehensive financial-planning tool for advisors and their clients. This integration allows advisors to offer their clients goals-based and cash-flow-based retirement plans, detailed income and estate-tax projections, and multiple scenario comparisons designed to create a more interactive, informative client experience.

Why it matters: Keeping your financial-planning software (and other fintech) tightly aligned with your custodian is a powerful thing. Congrats to our friends at TCA and RightCapital for the big win.

TD Ameritrade Announces Enhancements to Veo One –

What happened: TD unveiled a new Account Wizard at the Technology Summit for its Veo One workstation. The Wizard is an online tool that can process and pre-fill new-account paperwork for various tasks such as new accounts, wiring money and ACATS transfers. The Wizard will also generate a new account number in real time so that advisors can begin the process immediately. Other enhancements include automated alerts to keep advisors apprised of the status of various steps in workflows.

Why it matters: Account setup remains a pain point for advisors, and we hear this over and over again. TD is taking this to heart and making another step toward cutting the custodial clutter for RIAs with this enhancement to Veo One. Bringing the account-opening process down from days to a matter of hours is going to be great for business.

HSBC's Digital Chief Dismisses Threats From Fintech Challengers –

What happened: When confronted with the idea that big banks are facing an "existential crisis" from fintech challengers, Raman Bhatia, digital chief of HSBC in the U.K., told CNBC that those theories are "overblown." Several digital-only "challenger banks" such as Simple, Starling, Fidor and Monzo have gained momentum, leading to questions over whether such digital alternatives could weaken the position of traditional banks. Former Barclays CEO Anthony Jenkins warned that banks could be faced with their own "Kodak moment" by falling into irrelevance if they failed to keep up with the pace of rapidly developing fintech technologies.

Why it matters: Digital-only banks haven’t posed a huge threat to traditional banks (yet), but these days, any business model that doesn’t advance quickly enough is under threat of becoming irrelevant. "I think the David-Goliath [debate] or the existential-crisis debate is overblown," said Bhatia. And every Goliath ever.

Fintech Startup "Tomorrow" Targets Millennials in the Inheritance Product Space –

What happened: Fintech startup Tomorrow, which launched services across the U.S. in July, is targeting millennials for its inheritance products and aims to demystify trust funds as not just for the wealthy. The app constructs a will for free and connects with third-party services to pull in property valuations. The app generates legal documents in PDF format for users to sign, along with instructions on how to make them legally binding. In addition, Tomorrow lets the user set up a trust fund for free and have the option to buy term life insurance through the app from carriers including Omaha Mutual, AIG and Prudential Financial.

Why it matters: Business Insider says 74 percent of millennials don’t have a will, and financial institutions have been notoriously slow in reaching out to this demographic with inheritance products. Does this indicate a pattern that’s ripe for disruption? Or is it reasonable that those born in the '90s don’t have their will top-of-mind quite yet? Even though millennials are more likely to be focused on student loan debt and less likely to own a home or invest, making wills and trusts accessible to anyone is an awesome idea. I wonder if this will end up being a great tool for advisors to recommend to clients who need an upgrade.

Cybersecurity Firm Darktrace Raises $75M With an $825M Valuation –

What happened: Darktrace, a cybersecurity firm that uses machine learning to detect and stop attacks, raised $75 million, giving the startup a post-money valuation of $825 million, on the back of its 140 percent growth in the last year. “As we have seen from the headlines, humans are consistently outpaced by increasingly automated threats, organizations increasingly recognize that traditional defenses focused on past threats only provide the most essential protection,” said Daniel Kwong, senior vice president of information technology and security services at CITIC Telecom CPC.

Why it matters: Cybersecurity has been a big topic since WannaCry and GoldenEye made appearances, and with cybercrime estimated to cause $6 trillion in damages by 2021, it’s no wonder that cybersecurity is a booming business. Advisors in particular need to pay close attention to the “NPI” (non-public information) they keep on file for their clients.

Marketo Forgets to Renew Domain –

What happened: Marketo, a billion-dollar marketing tool that automates emails and other marketing tools across the financial space and beyond, failed to automatically renew its domain. was moved by the organization's registrar, Network Solutions, to its "pending deletion" pile after it failed to pay the $35 required for another year's registration. Since their customers use "" links to track user interactions, suddenly every hyperlink, image and form in millions of client emails and websites went dead. The company's main website vanished, so clients were unable to log in to their accounts, and its apps failed.

Why it matters: Oops! Twitter was on fire when this news broke (props to whoever started the #Marketopocalypse hashtag), and rightfully so. Keeping ownership of your domain name is Business 101! Main takeaway for advisors: when’s the last time you checked on the renewal status of [yourfirm].com? You’d hate to see it scooped up by someone else. Now, excuse us while we go triple-check that we own for the next 100 years or so. 

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