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Fintech Focus Roundup For November 14, 2020

Renato Capelj
·8 min read
Fintech Header
Fintech Header

Meet Sharesies, The Investment App For Millennials

The Nitty-Gritty: Founded in 2016, Sharesies is a fintech specializing in democratized stock market investing. The company is one of many other brokers that have popped up around the world, helping unlock low-cost access to listed companies and funds.

The idea behind the company, co-founder and co-CEO Leighton Roberts told Benzinga, resulted from his team’s rejection of the notion that millennials can’t afford investments due to their comfortable spending habits.

“There was an article in one of the big papers about how millennials would be able to buy a house if they just stopped eating smashed avocado and toast,” he said.

“We were like: ‘Why can’t we have our investments and eat our smashed avocado and toast.’ That’s how it started.”

Pros Unpack The Rise In Retail Trading

Dealers Chasing Deltas: Coronavirus pandemic lockdowns prompted millions who were searching for new forms of engagement to fuel a new rise in retail trading activity. The impact of this activity is widely believed to have changed the dynamics of modern market structure.

That’s according to Catherine Clay, senior vice president at Cboe Global Markets Inc, who said retail trading activity has become dominated by smaller orders on one side of the market.

“Some firms only allow clients to buy options,” she said Tuesday.

“When you’re putting more buy orders into the marketplace, the other side of that trade is obviously selling those contracts, so the dealers and liquidity providers are taking more short positions, and so some of these augmented market moves up and down may be a reflection of those dealers having short gamma positions.”

In the simplest way, when a market is in short-gamma territory, liquidity providers are forced to sell into weakness and buy into strength, thereby exacerbating volatility.

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Winners Of The Benzinga Global Fintech Awards

Benzinga, a leading news and data platform, in partnership with financial data and insights platform Envestnet | Yodlee, held the sixth annual Benzinga Global Fintech Awards Tuesday — a day of dealmaking, networking and recognition in the financial technology space.

The virtual event recognized and awarded disruptive innovators creating positive and diverse change in the financial services space.

Click here for a list of the Benzinga Fintech Listmakers that that were presented with awards Tuesday at the 2020 Benzinga Global Fintech Awards:

Rocket's Q3 Echoes Commitment To Innovation

The Take-Away: Rocket’s third-quarter beat is a reflection of the firm’s commitment to bringing increased efficiency and value to the lending space.

Since its start as Rock Financial in 1985, the firm has grown exponentially in accordance with ISMs, foundational principles put in place by founder and majority shareholder Dan Gilbert.

The firm’s strict adherence to these principles allowed it to become a national lending empire that has democratized access to homeownership and financial independence.

Now, as the COVID-19 coronavirus pandemic increased the digital disruption, the firm has shifted its focus to new technologies that automate underwriting and streamline origination.

"Homeownership is on the rise across the country, led by a new generation of first-time homebuyers," CEO Jay Farner said. "As a result of shifting demographics, and the ongoing pandemic, we are seeing rapid acceleration in the long-term shift from physical to digital transactions across the industries where we participate."

5 Brokerage Execs On 2020 Market Trends

One Big Thing: Lockdowns during the coronavirus pandemic have prompted a rise in speculative retail trading activity that's reflected in increased client order flow.

The trend was the topic of discussion among five market experts Tuesday at the Benzinga Global Fintech Awards in a panel moderated by Benzinga's Luke Jacobi.

The Options Clearing Corporation traded a record number of options in a day following positive efficacy news about the COVID-19 vaccine candidate being co-developed by Pfizer Inc and BioNTech SE, said JJ Kinahan, chief market strategist at TD Ameritrade.

James Putra, head of product strategy at TradeStation, said the volatility in different assets has been the primary engagement factor since lockdowns were lifted.

“Trading has become cool again,” he said.

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Technology, COVID-19, And Financial Planning

Progress Above All Else: The financial planning space must avoid stagnation, said Secfi CEO Wouter Witvoet.

“The typical decision people make is to do nothing, but there is a risk and reward there,” he told the Fintech Awards attendees.

“You need to start thinking about this early in order to maximize your gains.”

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How Fintech Is Tackling Access, Infrastructure

What You Need To Know: The financial services industry needs to address the 1.6 billion people without stable access to the sector, Basil Moftah, general partner at Global Ventures, said Tuesday at the Benzinga Global Fintech Awards.

“How do you bring them into the digital world with all the benefits that many of us have gotten used to?” he said during a discussion moderated by Crain's Detroit Business reporter Nick Manes.

“I don’t think we’ll see 1.6 billion people join the world through traditional banking. They’ll join it through their mobile phone, and that will be the only way they can access financial products,” Moftah said.

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Target, Big Moods Partner To Sell Stickers

What Happened: Big Moods, an online art store that sells stickers and accessories, formally announced a partnership with Target Corporation to sell stickers on the e-commerce giant's platform.

Why It Matters: Joey Rexford and his twin brother Andy launched Big Moods in 2018 after successfully growing the @CollegeStudent media brand into an influencer marketing company — Amp Social — serving clients like Jack In The Box Inc and Rate My Professors, which was previously owned by MTV.

The start of Big Moods came as a natural evolution of the brothers’ free-spirited media brand, Rexford told Benzinga in an interview last year.

“It was just an interesting place to buy things for the college audience. It took off, and we took that opportunity to expand the audience and grow into the sticker market.”

In light of Andy’s experience with depression, Big Moods partnered with Active Minds to support mental health awareness. Now, the company’s stickers support emerging creatives and mental health initiatives.

“This new partnership to sell on Target.com provides us the opportunity to continue our mission to spread positivity and provide high quality, fun, and relatable stickers to customers wherever they shop,” Rexford told Benzinga.

Sneak Peek Inside 'Robinhood Of Real Estate'

What Happened: Following a record-setting raise and nearly $500-million real estate acquisition partnership with Texas-based LYND, NYCE released a waitlist for its REIFY by NYCE app, which is set to launch late November.

“Yes, we’re getting ready to go live in the next few weeks,” CEO Philip Michael said an exclusive prototype reveal with Benzinga.

“The app will accomplish two things,” Michael said. “One, allow our current investors to track their investments. And two, give them exclusive first rights on the larger $500-million pipeline.”

The decision to move forward with a live launch comes after months of painstaking work by Michael and co-founder Martin Braithwaite, a soccer player for FC Barcelona. The two strive to mend disparities in social and economic justice among different classes and demographics.

“A lot of the issues you see in America are really manifestations of classism," Michael told Benzinga. "And the lower rung of the economic hierarchy has been inhabited by Black and brown people."

Empowerment Through Financial Literacy

Men, Women Divided: Women tend to be less confident in managing their finances.

That’s according to Jennifer Barrett, the chief education officer at Acorns, who stressed the importance of inclusion through financial literacy initiatives.

“Women are more [leery] of investing in the stock market and they have more concerns whether they’ll have enough money to cover them in retirement,” she said. “I do think we’re starting to see that shift a little, in part, because of some of these products that do make it easier and simpler to invest.”

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Robinhood Unlocks Cash Management Feature

What Happened: Robinhood, a retail trading platform that offers investors commission-free stock, ETF, options trading and cash management, formally announced its Cash Management feature is now available to all customers.

Finance Pros On How To Invest In The Market

Finding The Right Pick: The problem is that many beginners don’t know how to get involved.

That’s where financial literacy comes in, said Irusha Peiris of Investor’s Business Daily.

“We’re always trying to grease the probabilities as much as possible,” he said. “We use fundamentals to narrow down what stock to focus on, then the technicals — mainly chart patterns — that tell me when to get into that stock.”

Investors are often too quick to get involved, he said. Instead, Peiris urges the long-term approach where investors take the time to research and learn about products that can help them get on the right side of probabilities.

“It’s just human behavior on display here,” he said. “The only difference are the names.”

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Financial Markets Are Becoming More Diverse

What The Retail Investor Looks Like: Times are changing, said finance author Aaron Brown during one Benzinga Global Fintech Awards event.

“You better start swimming, or you’ll sink like a stone.”

Brown suggests that markets have gone through numerous generational shifts. In the 1920s and 1930s, the “greatest generation,” investors were taught to trust the government and take no risk, he said.

In the 1970s and 1980s, investors were taught to put their trust in the markets and the financial system.

“Today, another 50 years in the future, our children and grandchildren ... learned to trust neither the government or financial institutions,” Brown said.

“They trust themselves, but only in embedded networks — social networks, information networks crypto networks — and so far, their risk choices have been chaotic, from Hertz to Tesla.”

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