Where are all the new FinTech products?

The last five years has seen an explosion of activity in the Financial Technology industry. Much of this innovation has been centered around themes like “The Unbundling of Financial Services” or “Digital Distribution to Reach Millenials’. Silicon Valley realized how large and antiquated the financial services industry was, and a new generation of venture capitalists and founders went about tackling issues like online distribution of loans, UI friendly automated investing and consumer payments platforms that were easy to use. But despite the innovation brought upon us by SoFi, CommonBond, Prosper and LendingClub — aren’t we still consuming traditional fixed rate, long duration loans for critical needs (i.e. if you came down from Mars and saw an LC loan vs. a bank loan, would you think they’re any different)? Despite how easy and beautiful WealthFront, Betterment and WiseBanyan have made automated investing — aren’t we still just consuming broad index ETF’s? Sure Stripe has made payments much less complicated for developers — but aren’t we still just hitting checkout and pulling out our credit cards? Yodlee/Intuit/Plaid lets developers’ access bank transaction data with ease like never before — but aren’t we still beholden to our Wells Fargo standard consumer checking accounts? CoverHound allows us to compare our insurance policies with speed and accuracy — but aren’t we still consuming the same Geico auto insurance policy?

Sure, sure, sure — things are much faster, much more digital and much easier today. You can get better rates online for loans and accepting payments online doesn’t suck as much as it used to. All of the aforementioned companies have been wildly successful and have brought about real change — but have they actually changed the product we’re consuming? Is this not just the linear progression of an existing product and not the creation of something truly new?

What if we could harness data better and more acutely to create fundamentally new products and experiences? What if we could use all this data to create a new loan or insurance products, instead of just repackaging the same product in a slicker UI.

In fact, this may be where Silicon Valley and Corporate Innovation Arms have equal footing in defining the future. I hope and I think we’ll see:

• Non-FICO based statistics and data points to underwrite consumer loans.
• Social and physical data used to better assess health insurance or life insurance risk (to create new products).
• Consumers having access to non-traditional asset classes via automated investment products.
• Student loans that are secured by a percentage of your first ten years’ salary post-graduation.
• Using predictive analytics and machine learning to create dynamically priced travel insurance or micro duration product insurance.
• Using integrations into payment processing, HR administration and accounting platforms to generate standardized commercial credit scores for small and mid-sized businesses (new credit products).
• Consumer financing for electronics that restricts access in default but conversely democratizes and digitizes financing for the initial purchase.

This is the stuff that excites me — using data, using geolocation, using non-FICO metrics, pushing regulations for more dynamic products — and fundamentally new services.