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Who will the winners be in the future of fintech?

Nik Milanovic
Contributor

Nik Milanovic is a fintech and financial inclusion enthusiast, with a decade of work across mobile payments, online lending, credit and microfinance.

So what happens when fintech ‘brings it all together’? In a world where people access their financial services through one universal hub, which companies are the best-positioned to win? When open data and protocols become the norm, what business models are set to capitalize on the resulting rush of innovation, and which will become the key back-end and front-end products underpinning finance in the 2020s?

It’s hard to make forward-looking predictions that weather a decade well when talking about the fortunes of individual companies. Still, even if these companies run into operating headwinds, the rationale for their success will be a theme we see play out over the next ten years.

Here are five companies positioned to win the 2020s in fintech:

1. Plaid

In 2014, I met Zach Perret and Carl Tremblay when they reached out to pitch Funding Circle on using Plaid to underwrite small and medium businesses with banking data. At the time, I couldn’t understand how a bank account API was a valuable business.

Plaid’s Series C round in 2018 came with a valuation of $2.65 billion, which caught a lot of people in fintech off-guard. The company, which had been modestly building financial services APIs since 2012, recently crossed the threshold of 10 billion transactions processed since inception.

For those unfamiliar with Plaid’s business model, it operates as the data exchange and API layer that ties financial products together. If you’ve ever paid someone on Venmo or opened a Coinbase account, chances are you linked your bank account through Plaid. It’s possible in 2020 to build a range of powerful financial products because fintechs can pull in robust data through aggregator services like Plaid, so a bet on the fintech industry is, in a sense, a derivative bet on Plaid.

Those 10 billion transactions, meanwhile, have helped Plaid understand the people on its’ clients fintech platforms. This gives it the data to build more value-added services on top of its transactions conduit, such as identity verification, underwriting, brokerage, digital wallets… the company has also grown at a breakneck pace, announcing recent expansions into the UK, France, Spain, and Ireland.

As banks, entrepreneurs, and everyone in-between build more tailored financial products on top of open data, those products will operate on top of secure, high-fidelity aggregators like Plaid.

The biggest unknown for aggregators like Plaid is whether any county debuts a universal, open-source financial services API that puts pricing pressure on a private version. However, this looks like a vanishingly remote possibility given high consumer standards for data security and Plaid’s value-added services.

2. Stripe

Predicting Stripe’s success is the equivalent of ‘buying high,’ but it is hard to argue against Stripe’s pole position over the next fintech decade. Stripe is a global payments processor that creates infrastructure for online financial transactions. What that means is: Stripe enables anyone to accept and make payments online. The payment protocol is so efficient that it’s won over the purchase processing business of companies like Target, Shopify, Salesforce, Lyft, and Oxfam.

Processing the world’s payments is a lucrative business, and one that benefits from the joint tailwinds of the growth of ecommerce and the growth of card networks like Visa and Mastercard. As long as more companies look to accept payment for services in some digital form, whether online or by phone, Stripe is well-positioned to be the intermediary.

The company’s success has allowed Stripe to branch into other services like Stripe Capital to lend directly to ecommerce companies based off their cashflow, or the Stripe Atlas turnkey tool for forming a new business entirely. Similar to Plaid, Stripe has a data network effects business, which means that as it collects more data by virtue of its transaction-processing business, it can leverage this core competency to launch more products associated with that data.

The biggest unknown for Stripe’s prospects is whether open-source payment processing technology gets developed in a way that puts price pressure on Stripe’s margins. Proponents of crypto as a medium of exchange predict that decentralized currencies could have such low costs that vendors are incentivized to switch to them to save on the fees of payment networks. However, in such an event Stripe could easily be a mercenary, and convert its processing business into a free product that underpins many other more lucrative services layered on-top (similar to the free trading transition brought about by Robinhood).

How to get people to open your emails

Julian Shapiro
Contributor

Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.

We’ve aggregated the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this Growth Report.

This is how you’re going stay up-to-date on growth marketing tactics — with advice you can’t get elsewhere.

Our community consists of 600 startup founders paired with VP’s of growth from later-stage companies. We have 300 YC founders plus senior marketers from companies including Medium, Docker, Invision, Intuit, Pinterest, Discord, Webflow, Lambda School, Perfect Keto, Typeform, Modern Fertility, Segment, Udemy, Puma, Cameo, and Ritual .

You can participate in our community by joining Demand Curve’s marketing webinars, Slack group, or marketing training program. See past growth reports here and here.

Without further ado, onto the advice.


How can you send email campaigns that get opened by 100% of your mailing list?

Based on insights from Nick Selman, Fletcher Richman of Halp, and Wes Wagner.

  • First, a few obvious pieces of advice for avoiding low open rates:
    • Avoid spam filters by avoiding keywords commonly used in spam emails.
    • Consider using email subjects (1) that are clearly descriptive and (2) look like they were written by a friend. Then A/B your top choices.
    • Include the recipient’s name in your email body. This signals to spam filters that you do in fact know the recipient.
  • Now, for the real advice: Let’s say 60% of your audience opens your mailing, how can you get the remaining 40% to open and read it too?
    • First, wait 2 weeks to give everyone a chance to open the initial email.
    • Next, export a list of those who haven’t opened. Mailchimp lets you do this.
    • Important note: The reason many recipients don’t open your email is because it was sent to Spam, it was buried in Promotions, or it was insta-deleted because it looked like spam (but wasn’t). The goal here is to resuscitate these people. You have two options for doing so:
    • (1) Duplicate the initial email then selectively re-send it to non-openers. This time, use a new subject (try a new hook) and downgrade the email to plain text: remove images and link tracking. De-enriching the email in this way can help bypass spam filters and the Promotions tab.
    • (2) Alternatively, export your list of non-openers to a third-party email tool like Mailshake (or Mixmax).
      • First, connect Mailshake to a new Gmail account on your company domain.
      • Next, configure Mailshake to automatically dole out small batches of emails on a daily schedule. Let it churn through non-openers slowly so that Gmail doesn’t flag your account as a spammer.
      • Emails sent through Mailshake are more likely to get opened than emails sent through Mailchimp. Why? Mailshake sends emails through your Gmail account, and Gmail-to-Gmail emails have a greater chance of bypassing Spam and Promotions folders, particularly if the sender doesn’t have a history of its emails being marked as spam.