A Fintech Overview

The tech bubble has opened many opportunities for emerging businesses. Innovative technology has been integrated into almost all industries to attract customers and improve existing business. The financial services industry has perhaps been the most positively impacted by the introduction of new technologies. Financial Technology, or Fintech for short, has grown exponentially in both back end and direct customer services.

Mainstream Fintech companies have grown in popularity with younger generations. These companies have leveraged technology and made what used to be intimidating financial services easy and fun to use. Here, we are going to highlight three Fintech companies and look at how their innovation has led to their success.

Robin Hood

Robinhood officially hit the app store on December 11, 2014 as a zero-commission fee trading resource. The company removed the cost of brick and mortar locations by launching completely digitally. They market themselves to younger generations with a sleek app design, great usability, and enhanced security. Most of their fundraising success went toward developing the best security features which include password and finger ID encryption, bank account verification technology, and insurance of up to $500,000 provided by the SEC.

While at Stanford, founders Baiju Bhatt and Vlad Tenev, realized that there was no easy mobile app for stock trading. They were the first people to successful jump through the regulatory hoops and provide adequate engineering to successfully launch the financial app. Their business model has led to their great success by being transparent about their fees. The company charges no fees on financial transactions, unless stocks are bought on credit. They also charge interest on uninvested funds in an account.

Overall Robinhood used strategic UX and emphasized security to create an innovative app that has disrupted many of the top investment services.


Acorns launched in 2012 as an investing/savings service directed mainly at college students. The service rounds up purchases to the nearest dollar amount on a linked credit or debit card and invests the spare change in a computer managed portfolio. The company offers incentives for college students such as free portfolio management.

Acorns has also partnered with other popular companies with a cash-back incentive program. When users shop at companies such as Amazon, Apple, or Airbnb, they receive more than the standard “roundup” than they would have received with just the app. These partnerships have been successful in attracting and retaining younger users.

Similar to Robinhood, Acorns has successfully made investing easier for younger generations. However, Acorns gives users much less choice than Robinhood. The computer managed system looks at data such as age, goals, and income and recommends one of its several ETF’s to invest in. Acorns has been a great service for users who want their investing to be managed for them.


SoFi was founded in 2011 by four students who met at Stanford Graduate School of Business. SoFi started as an innovative new supplier of student loan options. Similar to the other companies above, SoFi launched digitally, and credits its digital presence for its low interest rates. A completely digital presence has helped increase their efficiency as data is collected and processed very quickly. SoFi used data other than credit worthiness to screen potential clients that most other lending services deemed not credit worthy

SoFi initially focused on refinancing student loans, but has now moved on to a more broad financial lending service, expanding into personal loans, home mortgages, and wealth management. They have recently launched a service in competition with Robinhood and Acorns called SoFi Invest, which is a automated investing service with a zero-fee approach. Sofi has leveraged its digital presence to increase efficiency and minimize costs so that their interest rates remain extremely competitive.


There are many more impressive Fintech companies other than the ones briefly outlined above. Many of these new firms are experiencing great success capturing new customers with their attractive technology and progressive appeal. Most successful Fintech companies share common characteristics: 1. They use technology to revamp an existing service 2. They market to younger generations that are more inclined to be attracted to new technology/services.