Breaking New Ground in FinTech

Today, more than 70 percent of Americans struggle financially. At the same time, these same households pay roughly $175 billion annually in fees and interest for financial products and services, which too often fail to improve their situations. However, using the right combination of financial health-focused products and services some FinTech products are helping US households to get better off.

In order to provide this benefit at scale, mass-market FinTechs must design revenue models that are both economically sustainable and that reinforce consumers’ trust rather than threaten it, a tricky task in an industry that is ranked by consumers as the least trusted.

In this report, Omidyar Network and Oliver Wyman investigate current revenue practices among financial health entrepreneurs, highlighting trends from data collected from surveys with 350 leading FinTechs, 11 case studies from frontier firms in the space, as well as advice from founders and investors collected during interviews and workshops with more than 50 entrepreneurs and sector leaders, and focus groups and digital diaries with dozens of consumers across income ranges and geographies. The research distills approaches on how to embed commitment to financial health into the company’s core strategy and how to mitigate the risks of its revenue model to customers.

Breaking New Ground in FinTech: A Primer on Revenue Models that Create Value and Build Trust” lays out, for the first time, the current FinTech revenue model landscape in the US, discusses emerging revenue strategies, and provides guiding principles for creating financial-health alignment. The idea is to inspire entrepreneurs serving the mass market and provide them with a framework that opens up the possibility of doing well by doing good.

The full report can be downloaded here.