FinTechs offering financial health-oriented solutions are making inroads into consumers’ trust and showing the industry that companies can do well by doing good.
- Sixty-five percent of FinTechs charge consumers directly for their services.
- Approximately, 3/4 of FinTechs rely on one material source of revenue (such as charging consumers directly). One quarter of surveyed companies rely on multiple sources of revenue and, interestingly enough, have raised on average twice as much investor funding.
- FinTechs that have raised the most funding to date build a lower cost (and often better) version of an existing financial product that consumers already pay for today, not a new solution with an unfamiliar value proposition.
- Mass market-focused providers were more likely than the average FinTech to rely on consumer income.
“One of the important trends we uncovered is that successful FinTech firms are not shying away from charging consumers directly for their services,” explained Sarah Morgenstern, investments principal at Omidyar Network. “The key difference is that they go above and beyond the established mindset around fee transparency to hit home to consumers what the real value-add is for them—a bolder way to build consumer trust.”