The Unbundling Of Finance

In a world where everything is being unbundled, allowing consumers to pick and choose from things like television shows and college courses, financial services are becoming à la carte, as well. People, particularly millennials, are moving away from single monolithic banking institutions serving the majority of their financial needs to hand picking the specialized services that work for them.

According to a recent survey of 2,450 American and Canadian millennials, 46 percent say they don’t plan to stay with their current financial services company, and 67 percent indicate they are open to using non-financial services brands.

Breaking Down the Big Bank

In the past, customers had to turn to a big bank like Chase, Wells Fargo or Bank of America to provide top-to-bottom financial services — checking accounts, home loans, insurance and wealth management. However, fintech startups like Simple, Venmo and Robinhood are allowing people to take control of every individualized aspect of their finances.

Beyond giving consumers control and options, many of these services are removing the friction of engaging in financial transactions and lowering the barriers to entry. It’s now as simple as a few taps on a mobile device to pay bills, transfer money and manage investments.

Unbundling Your Personal Finances

A smorgasbord of fintech options means that you don’t have to put the entirety of your personal finances in the hands of one company.


Services like Simple and Moven aim to eliminate banks altogether by providing banking without any fees. Your account comes complete with a debit card that works at thousands of participating ATMs, budgeting tools and money-transferring capability. More of a draw for millennials who prefer mobile banking, these services still lack more complex banking capabilities, which have made them less popular than standard banks.

Simple had just 100,000 users when it was acquired by BBVA, a big bank based in Madrid, for $117 million. However, newcomers like BankMobile hope to specifically target millennials with their suite of mobile-friendly features.

What’s being disrupted: checking accounts, savings accounts and checks.

Money Transfer

Venmo, PayPal, Google Wallet and Snapcash are just a few of the services that allow consumers to pay for goods and services or transfer money to friends and family. PayPal currently has approximately 165 million active customer accounts while mobile payments, like those provided by PayPal’s subsidiary Venmo, are projected to hit $90 billion by the end of 2017.

What’s being disrupted: ATM cards, cash and checks.

Wealth Management

Take control of diversifying your portfolio rather than putting your cash in the hands of an investor. Acorns, Betterment, Wealthfront and Robinhood allow you to invest your money where you want it with free stock trades, portfolio management tools and automated investing based on your goals.

These so-called “robo-advisors” have become so popular, particularly among millennials, that large banks have been buying in as well. For example, Citi Ventures and Northwestern Mutual both have invested in Betterment.

What’s being disrupted: large investment corporations like Fidelity and Vanguard.

Unbundling Your Business’s Finances

Receiving Payments

Credit card companies sometimes charge astronomical fees in order for businesses to accept them. In 2005, a class-action lawsuit found that big credit card companies like Visa and MasterCard were even working together to set higher swipe fees.

Square and Braintree are some services that allow small businesses to seamlessly accept payments — via credit card, bank transfer and even bitcoin — with significantly lower fees and less red tape.

What’s being disrupted: credit card companies.

Business Loans

Anyone who has tried to get a loan for his or her small business knows what a nightmare it is. Services like CAN Capital and Kabbage provide business loans and merchant cash advances for small businesses while companies like Fundera match you with lenders that offer the most competitive rates for your needs.

What’s being disrupted: big banks with restrictive loan approval policies.


Small businesses that can’t afford a dedicated accounting team can still ensure their employees and freelancers are getting paid on time and manage their benefits with affordable services like Zenefits, Wave and ZenPayroll.

What’s being disrupted: accounts payable departments.

Looking to the future

Fintech is finally coming of age, with global venture capital investment in fintech companies reaching over $2.8 billion in 2014, up significantly from $1.8 billion in 2013. This investment reflects a genuine desire for innovation from consumers that help them take control of their finances through technology.

As millennials mature, they will demand personal control and transparency of their financial interactions. From banking to insurance, any organization that doesn’t promote this new paradigm will likely not be around for the generations to follow.