Social distancing may have kept customers away from brick-and-mortar banks more often than not, giving financial technology time to shine. As consumers forge on following the pandemic, the ease of use provided by fintech could be a major disruptor for banks.
“A few years ago, I consulted on a project for a large, traditional financial company,” wrote Roger Dooley in a Forbes article. “Their product was offered both by long-established competitors and fintech startups. I was struck by the difference in approach – the big firm’s website was hard to navigate, made compliance disclosures prominent enough to be frightening, and had never been optimized for conversion.”
“The fintech firm sites, in contrast, were uniformly intuitive and easy to use,” Dooley added. “They included legally required disclosures but presented the information in a way that minimized their impact on the customer psyche. Their modern designs inspired trust. The next step in any process was always obvious.”
ETFs to look at in the growing fintech space include the Global X FinTech ETF (NasdaqGM: FINX) and the ARK Fintech Innovation ETF (NYSEArca: ARKF). Both ETFs are up year-to-date–FINX is up 22 percent and ARKF is up 5 percent.
ARKF invests in equity securities of companies that ARK believes are shifting financial services and economic transactions to technology infrastructure platforms, ultimately revolutionizing financial services by creating simplicity and accessibility while driving down costs.
Another fund to take advantage of within financial innovation is the Goldman Sachs Motif Finance Reimagined ETF (GFIN). GFIN seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Motif Finance Reimagined Index.
The fund seeks to achieve its investment objective by investing at least 80% of its assets in securities included in its underlying index. The index is designed to deliver exposure to companies with common equity securities listed on exchanges in certain developed markets that may benefit from the on-going structural changes in the support and delivery of financial services.
One more fund to look at is the ETFMG Prime Mobile Payments ETF (NYSEArca: IPAY). IPAY seeks to provide investment results that correspond generally to the Prime Mobile Payments Index, which tracks the performance of the exchange-listed equity securities of companies across the globe that (i) engage in providing payment processing services or applications, (ii) provide payment solutions, (iii) build or provide payment industry architecture, infrastructure or software, or (iv) provide services as a credit card network.
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