Fintech advisor Efi Pylarinou claims that digital bank Revolut is leading the “re-bundling” race among Europe based financial technology service providers.
“As technology [continues to] commoditize products and services at an ever increasing rate, re-bundling catch up is the name of the game for grown up and well-funded Fintechs.”
She points out that in the US markets, which have significantly more Fintech unicorns (firms valued at $1 billion or more), this trend is more prevalent.
“SoFi first comes to mind, which started with a laser focus on refinancing student loans (a large sector in the US market), then offered personal loans and mortgages; and then grew a wealth management offering that includes, equity investing, issuing ETFs, crypto investing; and a sizable money offering with a debit card, a credit card, a checking account, savings accounts; and partnerships with brands like Mastercard, Samsung, Lyft, etc.”
She further states that Wealthfront, which is notably one of the two independent or standalone Robo-advisors, is considered an early entrant that has impacted the entire digital investing sector. For example, Wealthfront launched direct deposits, saving accounts, prepaid and debit cards, personal loans and mortgages, Pylarinou noted.
“In addition to the business need to monetize [while] pushing towards rebundling, there is … a consumer push towards convenience. … customers … want to be served [in a] seamless [manner] anywhere and in a personalized way. SuperApps are the natives in the East and their approach has been strongly validated during the recent crisis. The West is on its own journey that is [focused on] rebundling which varies by region and is shaped by regulations and culture.”
Pylarinou argues that while Europe is ahead on the “progressive” regulatory front, the rebundling appears to be broader and more pervasive in the United States. She says that SoFi , Wealthfront, and other mature Fintech firms are seriously looking into re-bundling, especially those operating in the payments space. For instance, she points out that Square`s Cash App and Venmo have their own respective small business SaaS offerings and have branched out into debit and or credit cards and even crypto-asset investing.
In Europe, Revolut and Transferwise, both of which offer money transfer services, have been growing their operations and now offer debit and credit cards.
“Clearly, Revolut is the most aggressive rebundler originating out of Europe, as they have added crypto investing, commodity investing (gold and silver for now), low cost stock trading, the micro-savings Vault offering, and insurance. Not to mention their plan to apply for a UK banking license.”
She also mentions that Fintech Transferwise says it’s not seeking a banking license, but it may be focusing on integrating various investment features in the coming months.
She further notes that Scalable Capital is offering fixed-term deposits via Raisin. The company is also branching out into the brokerage business by providing a free trading service in Germany with the help of Gettex which belongs to the Munich Stock exchange.
She points out that German investors can now invest with zero commissions in “any ETF and have an ETF savings free account.”
Pylarinou adds that Zopa is a good example of a UK-based peer to peer (P2P) lender that’s focused on “rebundling” that also began offering services in the lending space. She confirmed that the company is now offering savings accounts and credit cards and aims to provide simple loans and investment options. Zopa is now also a UK based licensed bank.
Earlier this year, Pylarinou explained how Facebook’s Libra serves as a signal that Fintech firms like Visa, Paypal, Booking.com were eager to explore stablecoins.