Fewer people step inside a local bank branch anymore. Long lines, grumpy tellers, poor service- why bother? Enhanced user experience has given rise to the financial technology or fintech revolution as traditional banks, lenders and investment companies look back to see what’s gaining on them. From 2010 through 2015, investment in startup fintech companies has grown tenfold, from $1.8 billion to $19 billion in the five-year span. Online banking has been around for a couple decades, but corporate accountants saw it as a way to increase fee income and trim operational costs. Any enhanced customer experience or convenience was mostly an afterthought. Thousands of companies have popped up in the United States and globally, where Chinese companies such as Alipay and Tencent claim to have more customers than brick-and-mortar firms. Back in the United States, firms that offer low-cost credit cards and peer-to-peer money transfers have grown from about 1,000 in 2015 to more than 8,000 in 2016. Five particular fintech entities- a couple startups and a few more tenured disruptors- have changed the way people and businesses manage money. As the industry grows, so too do the job opportunities within it.
Social Finance or SoFi has had an impact on the way students and their parents fund college educations. Targeting the student loan market, SoFi has refinanced more than $5 billion in government and private loans. Among the advantages for consumers, the company offers college graduates a chance to boost their careers through webinars or personal coaching sessions. These resources help new job seekers find work and also assist present employees in negotiating salary increases. With efficient electronic decision-making and processing, SoFi is able to undercut rates offered by its competitors such as Sallie Mae and College Ave. Credit standards are a little looser as well. Borrowers with a 650 FICO score qualify and no minimum income requirements apply. Along with student lending capabilities, the financial services disruptor also offers wealth management and personal insurance options.
As with any cutting-edge technology SoFi always seeks specialized talent to further its mission. The San Francisco-based firm looks for personnel in operations as well as information technology. With locations in Cottonwood, Utah, Wilmington, Delaware and Silicon Valley, the company looks to fill numerous tech jobs. Senior Java engineer positions in Wilmington pay $225,000 annually, with a base salary of $157,000, $68,000 in yearly equity and a $19,000 signing bonus. A vast amount of job and salary data at SoFi can be found on company-specific pages at Paysa.com.
One of the older kids on the block, Stripe has been around since 2010. Operating in the B2B realm, the company has become a leading global processor of online and mobile payments. Stripe’s payment package gives businesses a turnkey solution to accept funds from buyers in more than 135 currencies. With data breaches and hacking posing a significant risk for e-commerce businesses, Stripe’s processing methodology routes credit card information away from customers’ servers. Instead, data is stored in a secure vault and never routed through those servers. The process puts less of a security burden on a client’s own developers and helps maintain payment card industry compliance. In April 2017, Stripe acquired Indie Hackers, a knowledge-based platform aimed at helping internet entrepreneurs maintain and grow their own businesses.
A company’s success is largely dependent on the strength of its employees. To that end, Paysa has developed a ranking system that measures the flow of quality personnel to and from top tech firms. The Paysa CompanyRank indicates that Stripe has been attracting and retaining key people from other highly regarded technology concerns. Of the 198,000 companies analyzed, Stripe ranks 25th, ascending rapidly from its February 2014 ranking of 3,094. In January 2016, Stripe eclipsed the Paysa ranking of Paypal, its main competitor whose ranking has fallen from 35 to 85 in the three-year period ending in February 2017.
To rate an auto insurance policy, all carriers look at factors including accidents, violations, credit history and the type of vehicle driven. Some companies offer small discounts for customers who drive infrequently, but those savings don’t add up to much. Metromile creates its insurance rates mostly on miles driven per month. The company does look at the typical rating factors and weights them less than their competition. Like Progressive’s Snapshot program, Metromile records mileage via a small device placed in the car, but doesn’t use aggressive and erratic driving habits to arrive at monthly premium. A corresponding mobile app can diagnose engine trouble or locate a parked car. Streamlined admin systems cut operational costs and allow Metromile to compete with regional and mutual carriers.
Tech jobs are plentiful at Metromile and growth appears imminent after the carrier raised $191 million in capital. Salaries average $141,000, and the typical signing bonus adds $15,000 to the mix. 25% of annual pay figures are $114,000 or less and the top quartile meets or exceeds $163,000 in total compensation. Data scientists earn $100,000 in base salary with $70,000 in equity options, annual and signing bonuses piled on top. By comparison, IBM’s average data scientist salary is $91,000 with $18,000 in equity and a one-time sign-on bonus of $8,000.
Investors have become frustrated with high management fees and underwhelming performance. As a result, robo advisers such as SigFig have enjoyed increasing popularity with millennials. Unlike brokers who charge a percentage of assets to manage portfolios, a basic SigFig account costs $10 per month. Its platform designs asset allocation models based on customers’ responses to a few simple questions about age and savings goals. And from there, the computers’ algorithms do the work, choosing securities that match risk tolerances and time horizons. Artificially intelligent systems analyze big data sets to arrive at the optimal client investment mix. The bots continually rebalance assets to ensure that the underlying investment mix stays true to the client’s strategy. The advantages to the consumer are twofold: lower costs leading to a reported 4-5% gain in total return on an average-sized portfolio.
Based in San Francisco, SigFig also has a location in Tucson, Arizona. The skills needed to land a technology job at the firm depend on the position. Backend software engineers, who earn $124,000 in annual salary, need a minimum 5 years of experience with software development and expertise in either Scala, Java, PHP, Python, Ruby or C++. DevOps engineers must have command of systems management tools such as Puppet, Chef or Capistrano. The base salary for this job starts at $109,000 and an $8,000 signing bonus. See more SigFig salaries and jobs here.
With money transferring in the traditional manner, the parties owed, especially in cross-border payments, incur long waits and hefty fees. Ripple deals in its own digital currency and has developed a revolutionary way to transfer payments between two parties. The blockchain allows funds to be moved faster, cheaper and safer than current credit card, electronic funds or wire transfers. All those transactions historically have passed through a financial intermediary such as a bank or government entity that essentially acts as a trustee for customer assets. Ripple makes use of a distributed ledger that all members of the blockchain network can access electronically, ensuring that the underlying funds exist and the transaction is valid. Deals can be settled in real time and the removal of the middleman greatly reduces cost. As of April 2017, 15 of the world’s top 50 banks use Ripple’s services to speed payments and create an improved user experience.
Ripple has wrestled elite management recruits away from Wall St. and its own Silicon Valley counterparts. Select talent has come over from the likes of Yelp, TiVo, JPMorgan Chase and BlackRock. The company continuously hunts for people to fill positions in data security and software engineering roles. Per Paysa, fullstack software engineers start out at $118,000 per year and information security engineers can expect to earn a base salary $98,000 with a $19,000 signing bonus enhancing the package.
Promise of the Future
Threatened with losing market share, financial institutions have two choices with regard to fintech firms: join them or acquire them. In the United States, the banking and investment businesses continue to be insulated by strict regulatory policies that govern how money and assets flow. Much of fintech’s appeal extends to developing markets, where looser controls invite innovation. With new technology comes the chance to open new revenue streams and the major players will want, and likely get, their own piece of the pie. While the advance of financial technology may be a death sentence for many back-office jobs, the flipside signals a boon for tech professionals whose skills continue to be in great demand. As startups bloom and funding rolls in, the IT sector will continue to drive domestic and foreign economic growth. The clear winners become programmers, coders and data scientists who roll with the sweeping tide.
For more information about these companies, visit Paysa to learn about salaries and job opportunities.