FinTech, or financial technology, is receiving loads of attention, but there is still a great deal of confusion over what it is and what it means—especially as it applies to retirement. Let’s try to clarify this.
We’ve all been incredibly frustrated by the fallout from the financial crisis, regardless of which generation we hail from. Retirement plans and every single financial, legacy-laden organization out there still include a ton of nest egg-sucking fees hiding in their fine print. FinTech cuts against this, ushering in the age of transparency. The traditional financial institution, from banks to retirement, is being crowd-transformed – by the people – for the people.
This includes a financial humanization overhaul. A vast portion of people—women and minorities for example—will now be included in this conversation from which they’ve previously been excluded.
Questions to ask
In this respect, advisers and employers have to ask themselves what financial providers are they working with and what do they stand for? Are they part of the financial literacy revolution? Do they offer fee transparency? Or are they part of the legacy problem? Remember—employers hoping to attract and retain talent these days, must align with what candidates and employees are looking for. 401(k) and health benefits remain at the top of that list.
FinTech heralds a financial revolution that is for everyone – not just the country’s top earners. It’s cloud-based, consumer friendly and offers education in a consumable manner. It makes an employer’s life easier, with low-cost tools that enable them to offer better products and greater resources to an audience that is starving for entrée to a financially secure future. Basically, it’s like taking all aspects of the financial realm, and making them as simple and frictionless as ordering a cab from Uber.
Like Uber, FinTech offers simplicity, transparency, mobility and portability. It embraces flat-fee, paper-free, transparent, simple, humanistic service. In other words, especially as it pertains to retirement, FinTech is here and it’s here to stay.