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How data underlies innovative financial and wealth technologies

Updated: Jan 23, 2023

We all know how important data is: there’s rarely a discussion nowadays that doesn’t encompass data or how it underlies the next great technology. Financial technology companies are no different: they need access to financial data to provide the fastest, most accurate, and secure digital services. There are many subgroups under fintech, such as wealth technology. Wealth technology (also known as wealthtech) refers to the use of innovative and forward-thinking technologies to provide an alternative to traditional wealth and asset management, with the aim of making wealth management and investment services more efficient and automated - bringing them into the new era of financial technology.

In general, financial technology (fintech) companies are already making their mark - 38% of the personal lending market in the United States was dominated by fintech companies. Globally, wealth management firms are investing in “big data” to enable their growth and scale. Commercial financial opportunities are experiencing similar growth, as well. Let’s explore the data technology that underlies the latest in financial and wealth technology.

Alternative lenders need access to financial data

Alternative lending refers to loans that are available outside of the traditional banking ecosystem of lending. Alternative lenders need access to the financial data on their customers - whether they’re personal lenders or providing commercial loans and financing. The type of data they need varies based on their target market, but typically to make a loan, lending, or credit decision, a lender makes a loan decision based on the credit history, repayment history, balance sheets, and existing collateral. To access this information efficiently, alternative lenders need access to financial data. By gathering this information electronically through the accounts held by the loan requester, alternative lenders can ensure the accuracy of the data and mitigate their risk and prevent fraud throughout the loan process.

Neobanks need access to financial data

Neobanks are financial technology platforms that offer applications, software, or similar technologies to enable streamlining of digital banking through web and mobile. Neobanks typically offer fee-free services like checking or savings accounts or payment processing, without the regulation of standard financial institutions. In order to process payments, movement, or deposits, neobanks need access to the financial accounts of their users to reconcile these transactions. They can also apply financial data towards benchmarking or providing insights to their customers.

Trade finance needs access to financial data

Trade finance refers to the financial services that are used by companies to facilitate international trade and commerce. The digital innovation in trade finance empowers people or companies to invest in the market in real-time and get faster access to it. Digital transformation in the space improves speed of onboarding and credit facilitation for the end customer by removing paperwork in favour of digital access to financial data.

Wealth management needs access to financial data

Wealth management firms have gone through a similar digital transformation as the aforementioned fintech branches. Wealth management is an investment advisory service. Much like trade finance, the onboarding process is sped up with digital access to financial information on their clients. When a company can eliminate paper documents or documents laden with errors, and can get financial data directly from the source, it mitigates errors and risk, as well.

Data underlies all innovations in financial and wealth technology

Whether these companies are providing innovative solutions for personal or commercial financial services, they need access to financial data. If you’re launching the next great fintech startup, whether it’s an alternative lender, neobank, trade finance, or wealth management firm, financial data makes it possible for you to provide the services your customers need. There are many services that enable you to access the financial data you rely on and you can find many of these options through the Marketware marketplace, as well. If you’re interested in joining the Marketware marketplace, get in touch with our team.

Author Bio:

Samantha Lloyd - Director of Marketing, Railz

Samantha Lloyd is the Director of Marketing at Railz, the Accounting Data-as-a-Service™ API. We're building the largest financial data network to support the future of finance. Samantha has a decade of experience building organic growth, brand, and digital marketing for startups and technology companies. Samantha hosts the Float or Founder podcast. In her free time, you can find Sam SCUBA diving, snorkeling, paddleboarding, and jet skiing.

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