By John San Filippo
In the pre-digital era, wealth management services – if they were offered by credit unions at all – were intended for high-net-worth members. And credit unions that offered wealth management services did so not so much for the revenue generated, but as a member retention tactic for those high-net-worth members. According to Ben Soppitt, president and CEO of Unifimoney, those days are over.
“The entry level asset base you needed to have [for traditional wealth management services] was between $200,000 and $500,000,” said Soppitt.” So you're talking to the top 1 or 2% of your customers and offering rich people wealth management services. That made sense up to about five years ago when this market change happened, the technology happened.”
Unifimoney offers a digital wealth management platform that can be integrated into a credit union’s digital banking system (online and mobile) and made available to all members. Soppitt describes the platform as “very similar to Robinhood,” the popular self-service investment platform.
“We are a digital wealth management platform for community banks and credit unions,” Soppitt told Finopotamus. “We enable them to extend their existing mobile app or online banking to offer several forms of self-directed investing.”
New Opportunities for Credit Unions and Members
Soppitt said that Unifimoney’s goal is to offer as many investment options as possible. “We support over 80 cryptocurrencies and are adding more all the time,” he noted. “We use Gemini, our crypto exchange platform and partner” to facilitate the crypto transactions.
The company even offers precious metal investing, he added. “It’s fully allocated, which means the member owns the underlying assets,” he explained. “It's not digital gold; it's the real thing. You can have it delivered to your home or store it securely in an insured vault.”
According to Soppitt, a shift in consumer attitudes about investing has created a tremendous opportunity for community financial institutions. “It’s not just crypto, but certainly in crypto, meme stocks, everything. It's created this extraordinary and swift structural change in consumer's behaviors and the way they think around investing,” he said.
“When we get our broker dealer license with FINRA (the Financial Industry Regulatory Authority), we'll be able to offer Regulation A and Regulation A Plus securities,” he added. “These are the things you find on Rally Road – sports memorabilia, trading cards, Mickey Mantle’s bat, wine, art. Everything's fractional. It’s the ability to fractionally invest in your hobbies.”
Soppitt said his company’s vision is “to be the Amazon of digital wealth management,” enabling consumers to invest in “anything and everything” through a mobile app or web browser.
“As long as it's compliant, as long as the tech works, and as long as the commercials work for everybody, we would consider integrating [a new investment option] into our platform and making it available to community banks and credit unions and their end users,” he said.
Tight Integration
Soppitt told Finopotamus that the Unifimoney platform is architected to be integrated directly into a credit union’s digital banking platform (versus requiring a standalone app). He demonstrated this on his own smartphone with his own account at an institution that uses Jack Henry’s Banno digital banking platform.
“You can view the balances of your various accounts,” he demonstrated. “If you actually want to do anything though, you have to essentially SSO (single sign-on) into our web app. Then anytime you want to come back, you just click the button and you're back in the credit union’s app. We pull the funds directly from the member’s checking account, and then the funds go back there when the customer liquidates the holding.”
This SSO method is not the only option for integration and not necessarily the preferred one. “We're integrating with other digital banking providers through an SDK (software development kit), so it'll be a more native experience compared to an SSO. Depending on how the credit union’s digital banking platform integrates with third parties, we can be as integrated as they allow.”
He added that, depending on the credit union’s infrastructure, Unifimoney is prepared to offer real-time money movement as soon as the technology is widely available.
A Separate Offering
Soppitt said that despite the tight integration, credit union members are always aware that they’re transacting through Unifimoney and not the credit union. “They have to be,” he said. “The SEC requires it.” He added that the first thing a member sees is a disclaimer informing them that they’re moving from the credit union’s system to Unifimoney, that any investments are not federally insured, etc.
“We're not trying to white label,” said Soppitt. “We're not trying to pretend that this is an extension of the credit union. In regulatory terms, it's simply an affiliate link.”
Soppitt warned that credit unions shouldn’t be scared off by the term wealth management. “My view is in 10 years’ time, everybody will have some form of crypto savings account or crypto bank account,” he said. “We're trying to bring innovation and trying to bring a full suite of services to the credit union so that [these investment services] are available for members if they want or if they don't, they can change their mind in six months or two years and add them then.”