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How Technology is Reshaping Financial Services

By April 13, 2018February 20th, 2021No Comments

Technology is radically reshaping the financial services industry before our eyes.

This paradigm shift is affecting everything from the way we borrow and lend money, process payments, and even the very nature your clients invest.

As an investment advisor, you have front-row seats to these incredible changes. Embracing these innovations will help you better connect with clients, distinguish yourself from competitors, and deliver higher returns via diverse, balanced portfolios.

Keep reading to find out how.

What Is FinTech?

Financial technology, or “FinTech,” refers to the start-up companies whose products or services are disrupting financial industries as varied as payment processing, loans, fundraising, investing, and even asset management.

The industry is still maturing, but investors are quickly catching on. A report from Accenture found that global investment in FinTech companies increased from $930 million in 2008 to over $12 billion by the beginning of 2015.

Despite this tremendous growth, a lot of confusion remains. “FinTech” has become a vague industry buzzword. Understandably, a lot of registered investment advisors – even extremely tech-savvy ones – aren’t quite sure how it works.

Understanding FinTech’s capabilities – and applying the latest innovations in your advisory services – can help you offer clients more diverse, profitable investment opportunities than ever before.

Why Should Advisors Pay Attention to FinTech?

It makes sense why lenders should pay attention to the latest developments in FinTech. But the implications for registered investment advisors, as well as the high-net worth individuals with whom they typically work, are no less significant.

FinTech products and services create advantages which are mutually beneficial:

  1. Investors get access to a wide variety of private equity opportunities, more efficient, affordable transactions, and increased transparency and accountability among the other stakeholders involved.
  2. Advisors get a suite of tools and platforms which allow them to offer clients more profitable, diverse, and vetted investments. You can offer superior opportunities via equity crowdfunding platforms – even without deep connections in that world. Advisors also can use FinTech to respond to changing investor preferences, as younger investors in particular grow more skeptical of traditional financial products and services.

How Has Technology Disrupted the Financial Services Sector?

Many FinTech companies fail, but those that succeed are massively disrupting traditional financial industries.

Here are just a few companies that are spurring the evolution of how customers view spending, investing, and managing their money:

1. WePay (payment processing)

This payment-processing software company serves global crowdfunding websites and marketplace platforms.

After being founded in 2008, WePay struggled to get the publicity needed to emerge from PayPal’s shadow. One co-founder, Bill Clerico, even went on a reality dating show not to find love, but in an attempt to raise publicity about his fledgling start-up.

Publicity isn’t an issue anymore now that the market has matured. WePay’s revenue for 2015 totaled $24.9 million – up over 4,000% from 2011. They’ve also attracted a nice chunk of investor capital: $75 million.

2. Robinhood (stock trading)

Robinhood is an app founded by two Stanford University roommates who aim to make trading stocks simple and commission-free.

This app was actually the most-downloaded app of 2015, according to both Apple and Google. Robinhood has already raised $66 million, attracting a wide variety of famous and high-powered investors ranging from the rapper Snoop Dogg, to actor Jared Leto and even venture capital firms.

3. Lending Club (consumer lending)

Lending Club is using technology to disrupt the entire consumer lending structure.

Instead of being forced to go through banks – traditional gatekeepers for loans – lenders can use the Lending Club platform to connect with creditors directly. This strips away the middlemen and reduces transaction costs.

4. JOBS Act of 2012 (equity crowdfunding)

The JOBS Act spurred the creation of not just new businesses, but an entire new investment industry.

Under Rule 506(c) of the act, private companies can now solicit investments from the general public. The law also democratized opportunities, as both accredited and non-accredited investors alike can purchase ownership interests in these privately-owned businesses.

Numerous platforms, like Equity Round and AngelList, have emerged to connect investors and opportunities in an efficient, transparent way.

5. Robo Advisor (investment advisory)

This application of FinTech affects registered investment advisors directly, and the impact could be significant.

Robo Advisors use algorithms, such as economist Harry Markowitz’s Modern Portfolio Theory, to provide portfolio management online with minimal human interaction.

This puts a lot of pressure on registered investment advisors, especially as Robo Advisor algorithms evolve to more effectively allocate and re-balance investor capital. They are especially attractive to younger investors, like millenials, thanks to low investment minimums and management fees.

How do you make sure the investors whom you advise get the best?

CapValue is a modern merchant bank with leading tech designed to help you adapt to the new investor economy. We break down the barriers that prevent many RIAs from pursuing private equity opportunities.

The result: you connect clients with more diverse and profitable private investments than they’d find anywhere else.

Working with CapValue.

Today’s environment means tougher competition, more discerning investors, and increased skepticism for traditional investment advisory processes.

But it also means a more flexible legal framework, making it easier for private companies to approach accredited and non-accredited investors alike, as well as transparent, efficient platforms to get the best private equity opportunities in front of investors.

This certainly helps benefit high net-worth investors. Working with CapValue also ensures you see plenty of benefits yourself.


  1. More diverse, balanced portfolios. Private equity investments are a great way to diversity and mitigate risk in investors’ portfolios across a wide range of industries. Even when the public market under-performs, strategic private equity investments – exclusively vetted and sourced – can bolster returns.
  2. Higher returns. On average, private equity investments perform better than their publicly-traded counterparts. This is especially likely when they are filtered through our thorough screening process and you are supplied with all the information you need to accurately assess every opportunity.
  3. A stronger connection with high net-worth investors. As the vast majority of high net-worth investors are self-made and made their money in private equity, they are often eager to invest in similar investment vehicles. Working with us gives you access to those deals via our EquityRound crowdfunding portal.
  4. Positioning yourself to nurture relationships with clients well into the future. FinTech products and services will continue to disrupt the investing world at an extraordinary rate. By working with us at CapValue, you can make full use of the latest technology (and transparency, ease of use, and lower costs that come with it) to amplify, not replace, your unique expertise. It’s a great way to build relationships with younger clients, who are increasingly skeptical of traditional financial products and services.
  5. Distinguish yourself from thousands of other RIAs. No RIA is going to distinguish themselves from the pack by focusing exclusively on publicly-traded stocks and mutual funds. Savvy, high net-worth investors are more likely to use FinTech to do a lot of those investments on their own. Expanding into private equity – and allocating an adequate percentage of funds in those opportunities – is a great way to add value and results in a competitive advantage.

To learn more about how CapValue can help you leverage the latest FinTech to offer clients equity in exciting (and profitable) private investments, visit

About CapValue, Inc

Based in Carlsbad, California, Cap Value owns and operates multiple financial services and technologies platforms designed to make that capitalization process more efficient and drive better results for issuer companies. Our businesses include DealBox, an Internet-based marketing platform available as a software-as-a-service and managed solution; Canna Equities and Equity Round, curated online marketplaces connecting investors with select, vetted investment opportunities and Cap Value LLC, formed to design venture investment vehicles and deploy principal capital into DealBox clients that meet our investment criterion.

Thomas Carter

Author Thomas Carter

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