Most of consumer fintech consists of unbundling services that previously came together.
Rather than attempt to sell customers insurance, bank accounts, brokerage, lending, and advisory services, a robo-advisor like Betterment only wants to manage your money.
Rather than sell a suite of services, Prosper and Lending Club only provide loans.
Billguard only wants to protect you from fraud.
This is nothing new. It’s a business model that attempts to replicate the success of the discount brokerage sites in the 1990s.
The problem is, the reason why financial institutions bundle services is that acquiring customers in finance is really expensive.
Traditional banks spend a fortune on prime retail spaces and pay people to open checking accounts.
It’s not clear that unbundling financial services, and thus making each customer less valuable, is actually a winning strategy.