Financial institutions in one form or another have been around for hundreds and hundreds of years. Over that time new technologies from the printing press to the telegraph to the fax to the Bloomberg have changed how financial institutions work. In every case these new technologies made financial services more efficient, reducing costs, increasing profitability, offering better products, and replacing inefficient practices and people.
Today, financial institutions face a new technology that will repeat the process, on-line asset gathering, and on-line deployment of those assets increasingly on mobile devices. As in the past decade, and as has been seen in other industries over the last ten years — media, travel, video, food service, shopping — this will create huge new opportunities for new players.
Finance and digital technology are now married in a new place: fintech.
At the core financial institutions all do the same two things: first, they gather assets, and second, they invest those assets. Commercial banks take deposits and make loans. Investment banks identify pools of capital and issue securities. Asset managers take savings and invest those savings. In every case, financial asset gathering is expensive because it requires office space and highly trained people in a highly regulated environment. Fintech will replace many of these people, and close many of their offices because mobile apps will give people the option of purchasing their financial products just like a shirt or skirt on the internet. New players including the big technology players, and existing financial services firms will all drive this change. This helps explain why roughly a billion dollars a week is being invested in fintech companies.
Interestingly, the target market will likely be the digital generation, interesting because this generational tends to be poor savers, and those that do save pay a high price for their financial products. This is particularly the case in asset management. The majority of people do not save more than $250,000 over the course of their lifetime, not because they are incapable of saving more but because they don’t how to save, start too late, don’t understand the power of compound interest, and importantly, are the prey of financial institutions that charge them very high fees.
The opportunity we see is to create an asset gathering/investing app that helps the digital generation save, and to provide a highly efficient and inexpensive way to invest savings that takes advantage of the well known and proven long-term annual performance of financial assets at a price now reserved for the wealthy.
Adventu will make saving and investment easy, fun, inexpensive and profitable.