Report Maps FinTech Revenue Models That Are Getting Traction With US Consumers - Seite 2

"Many current financial-health tools offer products for one specific need. So building strong linkages to other companies that provide broader solutions is a win-win," said Aaron Fine, partner at Oliver Wyman. "Trusted referrals provide great additional value to the consumers as well as a source of revenue that the firm can feel good about—avoiding conflicts of interest."

The report highlights trends from data compiled from 350 leading FinTechs, 11 case studies from frontier firms, advice from founders and investors collected during interviews and workshops with more than 50 entrepreneurs and sector leaders, and focus groups and digital diaries with dozens of consumers across income ranges and geographies. The research distills approaches on how to embed commitment to financial health into the company's core strategy and how to mitigate the risks of their revenue models to customers.

The analysis of the market landscape found that:

• Sixty-five percent of FinTechs charge consumers directly for their services.
• Approximately, 3/4 of FinTechs rely on one material source of revenue (such as charging consumers directly). One quarter of surveyed companies rely on multiple sources of revenue and, interestingly enough, have raised on average twice as much investor funding.
• FinTechs that have raised the most funding to date build a lower cost (and often better) version of an existing financial product that consumers already pay for today, not a new solution with an unfamiliar value proposition.
• Mass market-focused providers were more likely than the average FinTech to rely on consumer income.

"One of the important trends we uncovered is that successful FinTech firms are not shying away from charging consumers directly for their services," explained Sarah Morgenstern, investments principal at Omidyar Network. "The key difference is that they go above and beyond the established mindset around fee transparency to hit home to consumers what the real value-add is for them—a bolder way to build consumer trust."

According to the report, common traits of the FinTech firms at the forefront of mass market solutions also include a more curated approach to selecting third-party seller relationships. They rely more on referral models that shift from advertising to advising, which helps to resolve potential conflicts between the interests of sellers and the financial health of their consumers.