There’s some truth to the saying “You have to spend money to make money.” When you’re running a business, shelling out without seeing an immediate return is part of the territory.
You’d be hard-pressed to find an industry less affected by technology than finance. Or should we say more affected given its defensive posture? Whether it’s low-level lending or investing, things are still paper-based and run on bankers’ hours. Recently, Sharesight opened an online brokerage account for testing purposes and we had to go into the bank branch to finalise setup. After being pitched a credit card, a home loan, and a savings account, we huffed out after 40 minutes of pain (and still haven’t placed a trade).
A recent article in The Telegraph (UK), “The Silicon Valley of Fear” provides a snapshot on the state of play:
“Finance is one of the few areas that technology companies, which are defined by their almost limitless ambitions, have made few inroads in. Although internet and mobile banking have become must-have services, the vast majority of customers continue to favour the high street brands that have existed for decades. While the internet has changed many aspects of media, retail and communications almost beyond recognition, areas of lending, insurance and investing are unchanged from 20 years ago.”
Indeed the only areas of improvement we’ve seen are in everyday transaction accounts. Most of the major banks’ mobile apps are very good, as is peer-to-peer money transferring. PayPass is also a convenient development. But in the States, for example, paper cheques are still widely used for recurring payments. Waiting seven days for a cheque to clear puts a bit of a crimp in your cash flow.
The old-school areas of funds management and financial advice remain the most unchanged save for a few website facelifts here and there. This is a shame and an opportunity squandered. By using technology, investment companies could be targeting young people who are just beginning to invest and tech-savvy folks already in retirement, a.k.a. the “Silver Surfers.”
Scaled advice, for example, holds promise. Our partners at Stockspot have already put something similar in motion. Scaled advice companies offer online financial advice, using algorithms to select an appropriate mix of investments based on an investor’s personal data.
Orwellian this is not. Truth be told these algorithms are very similar to what the average financial planner would recommend based on a risk profiling engine, but a hell of a lot cheaper (fees being the best predictor of future returns). By looking at a list of investment options, scaled advice providers work out the best mix of investments considering salary, returns, risk, fees, and client expectations. If applied to index funds or ETFs, this model is hard to beat for young investors looking to build up core investments.
Specifically, we think this model has huge potential for industry super funds, in which there’s already a direct relationship with the end client and where commissions to intermediaries less of a factor. If clients are given a decent range of investments to choose from, that’s even better. Australian Super’s Member Direct plan being a prime example. They allow clients to invest in any company in the ASX 300 and a range of ETFs. Adding a scaled advice option on top of this would make sense. Paying a tiny per annum fee for a recommended investment mix and automatic rebalancing sounds like a fair deal to us.
An inverse product could be applied to those people who are in retirement. Why don’t asset management companies build a product that would help people find the right “glide-path?” Chances are, people could leave funds invested longer (increasing AUM fees, optimising tax, etc.) versus cashing out their entire nest egg in one go, thereby ending their relationship with the financial institution.
On a visit to a US-based financial planner last year at one of the world’s largest banking institutions (30,000+ financial planners), a Sharesight employee enjoyed the following exchange:
Adviser: “Use Mint.com to organise your spending habit info and then email me your login details, but make sure you send them to my personal email address”Sharesight employee: “Why? You guys don’t have anything better in-house to track that stuff down?”
Adviser: “Ha! Our technology sucks. Take a look at this screen.”
The adviser proceeded to turn his computer monitor, which showed an interface that looked like MS-DOS.
Instead, this person has shared his Sharesight portfolio with the adviser, thereby eliminating the need to track down his investment holdings all over again. Plus, there’s no need to awkwardly share what should be private login credentials with someone else.
We can’t change the entire industry overnight, but we can empower investors to take an important first step: freeing their portfolio data.
Welcome to the world of the super rich…
From superyachts to champagne – get inspiration from the oligarchs on how to submit your receipts this summer!
A recent article came to our attention which got us thinking. This article was written by Ryan Lazanis of Xen Accounting, a virtual accounting firm based in Quebec, Canada.
As a business owner, Lazanis understands the importance of providing exceptional service. He has also seen the frustration of his clients when faced with paying for his services at an hourly rate. If providing the best customer experience is important, then why not apply customer-first thinking to pricing?
Email:
Chartering a superyacht for a week certainly doesn’t come cheap at a weekly hire cost of €770,000 for this amazing yacht within a yacht! To speed up claiming this one back, have your yacht broker email the invoice direct to your personal Receipt Bank email.
Mobile:
When spending £330,000 on champagne in the Monaco Billionaire Club, don’t forget to snap and submit your receipt with the Receipt Bank App for iPhone and Android smartphones.
DropBox:
Give your PA access to your DropBox, so they can submit those dog grooming and car valet receipts whilst you’re away.
We won’t all be off to Monaco spending big money this summer but whatever you are doing, all of us at Receipt Bank hope you have a great time!
Using Expensify can help significantly reduce the overall time it takes to finish a report. Even better, pair it with an incremental behavioral change and you might actually look forward to submitting your expense report every month (we can dream right?).
Putting Off Something That Sucks – Hey, It’s Natural!
Sit back and think for a hot second: how do you file your expense reports?
According to Leo Babauta from ZenHabits, we spend much of our lives avoiding or putting off our problems. People hate doing expense reports because it’s always been a long and tedious process that involves finding crumpled pieces of paper, manually entering a load of expenses and then triple-checking everything to make sure it’s all correct. As a result, you think of expense reporting as a problem that you want to put off for as long as you can.
At Expensify, we want to make those monthly, hours-long expense reporting rituals a thing of the past. We want to change the way you think about and do expense reports. How?
Try It Out: A Small Change in Behavior
Instead of throwing your receipt in your bag or pocket, use our mobile app and take a picture of the receipt when you get it. In doing so, you are accomplishing four things:
You reduce the amount of clutter in your bag or pocket. A photo of your receipt = paper receipt in trash.
You also minimize the risk of losing the receipt down to zero.
You decrease the amount of time it takes to file expense reports by handling your expenses at the time of purchase instead of filing a pile of them at the end of the month.
Your uploaded receipt can be sorted with categories and tags, which helps you organize expenses automatically.
Once you take that photo, our SmartScan technology will transcribe the receipt for you so you don’t have to enter the information manually. More importantly, by taking a picture of your receipt as soon as you get it, you’re creating a behavioral change that will fundamentally alter the way you do expense reports. This tiny change might seem inconsequential, but the power of habit is an incredibly powerful, subconscious phenomenon that can change the way you do expense reports forever. Repeat this action often enough, and you’ll be able to cultivate a strong expense reporting habit.
Take a Photo, Thank Yourself Later
With this small habitual change, a cursory glance over your expense report at the end of the month is all you’ll need to do before submitting it to a manager. No more high volume, last-minute scanning, organizing, or detailing. How amazing does that sound?
Don’t take our word for it. See what users have to say about how Expensify is changing the way they do expense reports:
Whether you work at a startup, a large corporation, or something in between, the end of the month always means one thing: it’s time to get those expense reports in! People often consider expense reporting to be a pain in the elbow, and that’s why we’ve made it our mission to make expense reports suck less.
I had a conversation with a good friend last week that got me thinking. She has recently started some contract work after having a baby. She’s working from home; juggling motherhood and meetings, feeding and phone calls, and managing suppliers in between managing nap times.
You’ve got a little creative agency, and it’s doing quite well. You’ve landed a few high profile clients, and your reputation in the community is growing. You’re even in line for a couple of awards this year.