Wealthfront, a leading consumer fintech and pioneer of the robo-advisor industry, is proud to announce that the company now oversees more than $50 billion in assets for over 700,000 clients, largely young professionals across the United States.

UBS' Roboadvisor Wealthfront Announces $50 Billion AUM Milestone - Fintech Schweiz Digital Finance News - FintechNewsCH

If you have a 401(k) account and recently left your job or were laid off, you might be wondering what to do with your retirement investments. But even if you’ve left your employer some time ago and still have a retirement account there,

Best places to roll over your 401(k) in November 2023

Betterment, launched by John Stein in 2010, was one of the first robo-advisors marketed to the public.  “I think that especially with the Vanguards and the Schwabs, they often rolled out a product that emulated what we brought to the table,

Robo-advisors find their niche

Artificial Intelligence (AI) has emerged as a transformative force in various industries, including finance, healthcare, and e-commerce. While its potential for efficiency and productivity gains is widely recognized, AI is also reshaping the landscape of wealth generation and wealth management.

Harnessing AI’s Wealth-Generating Capabilities: A Glimpse into the Future

Wealthfront has increased the Federal Deposit Insurance Corporation (FDIC) coverage for its Cash Account up to $8 million for individual accounts and $16 million for joint accounts. In the unlikely event that Wealthfront fails,

Wealthfront’s Cash Account Now Offers FDIC Coverage Up To $8 Million

With Wealthfront, you get low-cost access to a diverse investment lineup, excellent planning tools and a variety of tax-saving strategies. The company also offers access to individual stocks for ...

Wealthfront Review 2023: Pros, Cons and How It Compares

Wealthfront‘s Cash Account offers up to $8 million in FDIC insurance for individuals and up to $16 million for joint accounts. Thanks to the company’s software-based approach and partnerships ...

Wealthfront Cash Account Offers Up to $8M in FDIC Insurance via Partner Banks

In the end, my fiancé and I opened a cash account with Wealthfront. While Wealthfront is a robo-advisor, it offers a great cash management account with a competitive APY of 4.80%, which you get regardless of your balance (well above the national average ...

Saving for My Wedding Is So Much Easier With a High-Yield Savings Account

After getting engaged, I knew we needed to open a high-yield savings account to save money for the wedding. We chose Wealthfront's cash account which pays 4.80% APY.

There is a list of fintech trends to watch out for, as the rapid pace of fintech innovation is transforming finance for both businesses and consumers.

Revolutionising Finance: The Latest Trends in Fintech Innovation

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E-commerce has seen an incredible boom in recent years due to COVID. But even as the pandemic restrictions were mostly lifted across the globe, the conveniences of online shopping are here to stay, and . Morgan Stanley predicts that the e-commerce market will grow . the sector continues growing from $3.3 trillion in early 2022 to $5.4 trillion in 2026 On the other hand, the banking sector is seeing a decline amid rising interest rates, high inflation, and uncertain perspectives for business activity. The red warning light flashed bright in March 2023, as the 16th largest bank in the US, Silicon Valley Bank (SVB), after a bank run. Amid the rising panic, smaller players like Signature Bank . Even the biggest players cannot be regarded as safe anymore, as the Credit Suisse giant was recently taken over . The world’s banking majors like and report profits shrinking by as much as 20%. collapsed followed by its peer, UBS JP Morgan Citigroup At the crossroads of these two major trends, the e-commerce boom and the banking sector turmoil — lies an opportunity known as Banking-as-a-Service (BaaS) and Embedded Finance. Rising tech companies are creating innovative products, like marketplaces and aggregators that, at some point, can leverage financial services. Banks are seeking ways to boost their revenue and client base. Blending these needs is a win-win situation for both sides. According to McKinsey’s estimates, embedded finance market revenue reached $20 billion in the US alone in 2021 and could still . Another estimate by suggests that this segment would grow to over $187 billion globally by 2027, while BaaS platform revenues are set . double within the next three to five years Juniper Research to reach $38 billion, up from $11 billion in 2022 How it works Digital life is becoming more and more complicated, so it is no surprise that customers are increasingly looking for all-in-one solutions. Brought to the pinnacle, this logic leads us to giant ecosystems, combining goods, services, and finance in one seamless experience. As early as 2020, the world’s leading companies were ecosystems. The path to an ecosystem for the biggest players is obvious: acquiring their financial service providers and creating proprietary in-house solutions that would be tailored to the company’s internal systems and demands from the start. This was the strategy pursued by major retailers like and . In a lower league, the need for seamless solutions is satisfied by cooperation with BaaS providers to create an embedded finance experience for customers. Classic banks own and operate the entire value chain, from the banking license to engaging end-user B2B and B2C customers. In BaaS, the value chain is split between partnering companies, enabling them to focus on what they do best and make profits from it. There are (and an infinite number of blends between them) of BaaS services: Walmart IKEA four major models offer their banking licence and products, operations, and/or technology for use by aggregators, other banks, and non-financial companies. One example of this model is Uber, offering its proprietary debit card to new drivers and delivery partners. With this card, they can instantly use money paid for the journeys they performed. Also, they can benefit from cashbacks and incentives from Uber partnering vendors. Another example is SoFi which offers investment products as well as loans in one financial super app. Also, clients can opt for a debit card issued by Bancorp to complete their finance management package. Providers benefit from BaaS by offering banking services to customers of distributor partners, scaling existing assets, and generating incremental revenue at a minimal cost. Providers act like Providers, but also lend their capabilities to other vendors to compose a complete out-of-the-box solution. Shopify is one example of this model, integrating small businesses’ accounts held at Evolve Bank & Trust with an e-commerce platform. Clients are offered debit cards and tools for monitoring their finances. Cash App by Square is another example, offering peer-to-peer payments, investment and cryptocurrency trade. Cards are offered via Marqeta and its banking partner, Sutton Bank. By aggregating other providers, provider-aggregators can offer integrated financial products, which can deepen relationships with distributors. Providers-Aggregators leverage end-customer relationships to offer unique financial services propositions. This model is employed by global players like Facebook, Amazon, and eBay to integrate financial services into marketplaces and ecosystems; by Xero and Shopify to offer B2B services; by retail giants like IKEA, Macy’s and Walmart to offer point-of-sale lending, loyalty programs and co-branded financial services. Finally, it enables players like Wealthfront and Aspiration to offer digital banking and niche fintech services. In this model, providing banking services creates new value for customers, enabling distributor partners to strengthen their core business. Distributors enhance the propositions they distribute by adding new products or technology from multiple providers. For instance, Google Pay offers a digital wallet for conventional and online purchases as well as peer-to-peer payments. Also, it offers tools for finance monitoring and checking and saving accounts with several banking partners. The Lending Club enables small businesses to open and manage their accounts, including payment acceptance. Accounts are enabled by several fintech partners like Alloy for verification and KYC, Treasury Prime for lifecycle APIs and Marqeta for card issuance. By aggregating providers, these players offer the elevated experiences that customers are demanding; for non-financial companies this model enables them to distribute banking services without becoming a bank. Distributor-Aggregators Choosing the right model and partner The primary question is: how are you going to grow your business and what is the primary source of your income. Benefits do not distribute equally along the value chain, so it is important to find the right place in it. Most of it concentrates on the risk-bearing side of providers and on the customer-relationship side of distributors. According to , the majority of revenues from embedded-finance lending products, 55% of the $14 billion in the United States in 2021, accrued to the balance sheet provider, the firm bearing the risk of credit default. However, with payments and deposits, it was the distributors who owned the end-customer relationship who benefited most. In lending, for instance, they earned $4 billion of the remaining $6 billion revenue pool, equal to 30 percent of total revenues. McKinsey research Choosing the right partner among banks may point away from the biggest players. For banks with full-fledged proprietary delivery networks, embedded finance may pose a . However, banks with a smaller retail presence, such as community banks and regional banks, may see it as a good opportunity to grow without making hefty investments in building their own sales funnels. cannibalization risk Another thing to keep in mind is whether you should choose to partner with a BaaS platform provider directly or opt for cooperating with a fintech intermediary to offer embedded finance. Samuel Head, head of EMEA banking sales at Currencycloud, a provider of cross-border multi-currency transaction solutions, suggests a . simple rule of thumb “A company considering embedding financial services simply needs to consider how much ownership they wish to have. And what their end users’ needs are. In the main, if you are not in FinTech, find a FinTech company you can trust to embed a quality service that helps you sell more of your core product or service,’ Head told . “If you are a FinTech, think about using a BaaS supplier. It’s actually a good time to build in redundancy and to be very careful when selecting your partners.” Fintech Global

Enhancing Competitive Advantage in E-commerce Using BaaS and Embedded Finance

Financial data is essential for making informed investing decisions. Without data, you cannot assess a company's financial health, determine valuations, or evaluate risk. It’s like shooting hoops blindfolded. Throughout history, financial information has been safeguarded and only available to those who could afford it. Bloomberg, a leader in financial data since the early ’80s, charges nearly $25,000 per year to access their terminals. Because of this, institutions had a massive data advantage over individuals. However, access to, and the availability of that financial information has changed dramatically in recent years with the emergence of APIs. Now, individuals can access the same financial information that has been available to institutions for decades, at a fraction of the cost. Over the last twenty years, financial data APIs have quickly become popular for individuals looking to backtest strategies or conduct other research. Now, algorithmic trading represents nearly two-thirds of all trading volume on US exchanges, according to Select USA. There is a good chance you’re reading this article because you’re looking to source financial data for a project you’re working on, so I will spare you any further details about how APIs work or why you may need them. However, I will caution you, not all APIs are “created equal.” The option that best suits you, may not be the best for someone else. So with that being said, here is a list of some of the best financial data APIs on the market, updated based on the financial market data landscape in 2024. Alpha Vantage Alpha Vantage is a popular financial data provider focused on delivering accessible and developer-friendly APIs. The platform is supported by a large community of software developers, tech-driven investors, and individual traders. Integration is simple, with over 750 open-source repositories across various programming languages. They deliver a massive data index with over a billion data points covering an extensive range of markets including stocks, crypto, commodities, and currencies, along with over 50 technical indicators. Additionally, they offer a generous free tier with access to 20 years of historical data, making it an attractive option for both hobbyist investors and serious professionals. : Stocks, Fundamentals, Technicals, Forex, Crypto, Commodities, Financial News, Economic Data, Corporate Events, and more. 20+ years of historical data. Coverage Barchart OnDemand Barchart OnDemand offers a variety of cloud-based data services to strengthen your applications and workflows. With Barchart, you can access reliable real-time and historical data for stocks, options, futures, and forex, as well as market data, analytics, news, and other financial content. Their offerings are highly customizable and priced based on usage, allowing you to select certain data feeds and only pay for what you need. : Stocks, ETFs, Fundamentals, Options, Futures, Forex, Crypto, Commodities, Financial News, Corporate Events, and more. 15 years of historical data. Coverage Tradier Tradier is one of the few platforms that combines market data with a trading API, allowing its users to build and test strategies, and also execute trades under the same roof. Opening a brokerage account with Tradier is free and can give you access to a range of market data such as real-time equity and option pricing as well as key company fundamentals. However, it should be known that if you only plan to use Tradier for market data and don’t plan to execute trades, they will charge “inactivity fees” so keep that in mind. : Stocks, Fundamentals, Options (including greeks), and more. Coverage Intrinio Intrinio provides access to a variety of financial data and analytics through a unique pay-per-service model, allowing you to choose the specific data packages you need. They offer five separate packages (Stocks, Options, Fundamentals, ETFs, and ESG) each with three tiers (bronze, silver, gold) with varying access & limits. They also boast a massive archive of alternative data feeds, so if you’re looking for an API that offers alternative data, Intrinio is your best bet. Intrinio is on the more expensive side, but you surely get what you pay for; that’s why Intrinio is trusted by many reputable fintech firms & financial institutions. : Stocks, ETFs, Fundamentals, Technicals, Options, Financial News, Economic Data, Corporate Events, and more. 50 years of historical data. Coverage Xignite Xignite is considered one of the leaders in the financial data industry as they power high-profile fintech and wealth management companies such as SoFi, Betterment, Wealthfront, and more. They source data from over 6,000 exchanges globally to provide institutional-grade, real-time, and historical data for a broad range of asset classes and markets with ultra-low latency. Xignite certainly caters its product to enterprise clients and therefore has some of the highest pricing in the industry. : Stocks, ETFs, Fundamentals, Options, Futures, Forex, Crypto, Commodities, Swaps, Mutual Funds, Fixed Income, Corporate Events, and more. Coverage Final Verdict (TL;DR) There’s a lot to consider when selecting the market data provider for your project. Each of the APIs surveyed here (also summarized below) has its own advantages and disadvantages so I recommend you spend some time on each site to get a better understanding of which API best fits your information needs in 2024 and beyond: is a popular provider among data-driven investors & traders due to its vast accessibility. They’re known for their clear documentation, affordable pricing, and generous free tier. A great option for investors looking to gain an edge! Alpha Vantage is another accessible financial data platform offering customizable plans that allow customers to pick & choose which data feeds they want to pay for. They cover a broad range of endpoints from equity pricing data to futures & options. Barchart OnDemand combines market data with a brokerage account to allow users to build & test trading strategies, and also execute those trades with just one integration. (Alpaca is another similar platform.) Tradier offers a unique pay-per-service model, allowing you to choose the specific data packages you need. A good option for sophisticated investors and app developers looking for a focused and deliberate approach to data services. Intrinio is one of the most expensive, yet powerful APIs available in the industry. They source institution-grade data from over 6,000 exchanges globally and power many high-profile fintech and wealth management companies such as SoFi & Betterment. Xignite Last Updated in January 2024

5 Best Stock Market APIs in 2024: A Guide for Data Scientists & Algorithmic Traders

The year 2022 brought a number of financial problems for investors toward the end, a period which has become known as the crypto winter of 2022. This period recorded a major downturn in the value of cryptocurrencies. In the midst of this, a serious financial crisis was also recorded in the crypto space known as the FTX scandal where a major crypto company folded up with people’s funds. As a writer in the crypto space, I personally witnessed a downturn in gigs in wake of these events and like me you may have lost money in one way or the other. Hence, it has become important to be very careful in making financial decisions so as not to make costly mistakes that one may come to regret. Below is a list of actions you may consider implementing to make the best use of your resources in these hard times. Technology is advancing very rapidly and leveraging on innovations like artificial intelligence, block chain technology and other fintech tools, finance companies and software developers have flooded the internet with many tools that will aid people not only easily enter the finance market but also become educated and proficient at it. You may want to adopt wealth management tools: While you may rightly distrust some of these tools due to many scam apps that are also being released or just prefer to rely on your good old personal expertise, it may also be advisable to adopt some of these tools at least to improve your efficiency as an investor. Some popular tools you may want to check out include; Akt is a wealth tech platform that promotes profitable savings using secure block chain enabled Euro vault technology and high interest rates of about 8% annually. The platform combines artificial intelligence and the experience of financial professionals to provide users with automated tools to expertly manage their traditional and decentralized financial assets. Wealthfront gives you high quality financial advice to help manage your portfolio. This platform is built to help you invest in the long term through an automated diversified investment account. Revolut is a personal finance app for long term management of transactions. This platform is built to be a comprehensive all things money platform allowing users to smartly spend, send, save and invest in one place. Stash is wealth tech app for management of investments in crypto, bonds, forex etc. Stash described as the investing app for building long term wealth. This goal is accomplished through the use of automated investing tools, low and transparent fees, profitable interest rates on the platform. Perhaps there is no better time to learn about a subject than when there is a problem to solve there that may turn out to be beneficial. This is very true for the finance market. Due to the proliferation of fintech apps in both the regular finance and crypto world it has become very easy to begin investing in financial assets. Hence, many people have gotten onto the field that may not be very informed on how the market works. Hence, if you’re one of those, or even a seasoned expert, you may want to read up some more. Educate yourself more about the financial market: Now may a good time to know about a bull market and a bear market. A bull market as may be obvious from the name refers to a period of great performance in the finance market. It’s often a very profitable period and many people make money in times like this. A bear market on the other hand refers to a period of poor performance in the finance market. Hence, the crypto winter being experienced is a bear market period (probably because bears hibernate in winter and because it happened in the winter of 2022). Bear markets often occur due to a negative perception of trends in the market that discourages investors, just like the many crashing of some cryptocurrencies that preceded the crypto winter. With that said, an investor should know however that a bear market period like the crypto winter does not signify the end of the market. but the market recovers eventually. Hence, there is a good chance that crypto currencies will recover from the down turn. Historically a number of bear markets have been recorded In summary, if you are discouraged and planning to give up on the market entirely due to the crypto winter, that may not be too advisable as there is still hope of market recovery. The value of crypto currencies is down currently so for many people if not most, its time to avoid the market. This is a natural feeling but sometimes what seems obvious can be misleading. Now might actually be a good time to invest but maybe not too heavily: The financial market itself is actually about discovering opportunities and if well observed the crypto winter period can actually be a blessing in disguise. How you may ask? Well, the same reason why you may be trying to run away! The prices of crypto currencies are down so they are now more affordable! Given how we’ve already established that historically speaking, the crypto market has a good chance of making a recovery, you may to invest some money in crypto assets at a lower price now so that when the market eventually recovers, your asset could significantly appreciate in value and you can sell it for profit. There’s often a serious rush to invest in appreciating financial assets, so many buyers will likely be available for the asset. However, the market is still volatile and unpredictable so you may not want to pour in all your savings in it or even any money you may need soon. As you should already know, invest only what you can afford to lose. I know, you came in here to be an investor and not to stress yourself with another task that will disturb your precious schedule. But, if we are speaking honestly you probably came into the crypto world because you saw (or maybe just heard about) the great potential in it. You should know that investing is not the only way of benefiting from this potential. You may want to discover other ways of making money from crypto: There are several other ways of making money from crypto and not all actually feel like a job. A good example of such opportunity will be crypto gaming. A number of play to earn web 3 games have already been released which allow you to earn NFTs or currencies from playing. You may want to check this out to make money from a leisure crypto activity. If you already have a lot of knowledge about investing in crypto, you may want to become a crypto based content creator and make money from making investment videos, writing crypto articles or creating investment tutorials. You can post videos on monitisable platforms like and or you can sell articles on platforms like marker etc. Youtube Tiktok Conclusion The crypto winter of 2022 is a bear market period that has discouraged a lot of people in the finance world but as has been highlighted bear markets also create an opportunity for great improvements. I will advise that instead of just sitting back to wait, investors should adopt these named (and other related) best practices in wealth management to make the best of the situation and place themselves in a profitable position when the dust (or should I say winter snow) clears.

Actions You May Want to Take in a Post Crypto Winter

The Birth of The Startup Through PayPal of The Early Days

make investing easy, even automatic. If you’re a set-it-and-forget-it type person, you’ll love how robo-advisors make investing simplified. You don’t need to understand the market or even choose your investments. Robo-advisors The platform does everything for you. After you answer questions about your goals and time and link your bank account, the platform handles the rest. But you have many options, hundreds of robo-advisors to choose from. Which platform is best for you? We’ve provided our top picks for the best robo-advisors of 2021 below. Why Should You Use a Robo-Advisor? The great thing about robo-advisors is that practically anyone can use them. You can have a quality investment portfolio created for you based on your goals and timeline for a relatively small cost. In the past, most people used to have to be either rich or knowledgable to gain access to the top investments, thankfully today, that is no longer the case. Robo-advisors have so many great benefits compared to , with the most notable one being that your emotions are left out of decisions. When you invest yourself, it can be hard to avoid emotional decision making. If the market crashes, it can cause sheer panic among most investors, leading to irrational decisions. DIY investing Robo-advisors can help avoid those irrational decisions through automatically reallocating your portfolio. Although a crash may feel daunting at first, you should feel safe knowing that the algorithms and computer programmes know the best course of action. If you're new to investing, then a robo-advisor is an excellent way to dip your toes in the stock market. They're low-cost, automated and don't require in-depth knowledge of the markets. Many great robo advisors are out there so don't get too caught up on which one is the best. If you don't like how your account performs or how the platform allocated your funds, then it's very straightforward to change advisors. How to Choose the Right Robo Advisor Before you look at your options, knowing how to pick the right robo advisor is still an important task. Ask yourself: How much do I have to invest? Each platform has a minimum investment requirement. Some are $0, which is great for beginners, but others are as high as $50,000. What is my risk tolerance? Ask yourself what would happen if you lost 10 per cent or more of your portfolio? Could you stomach it? What are your goals? Your timeline plays an important role in what you invest in. The longer your timeline, the more risk you can take and vice versa. Betterment Pricing: 0.25 percent of assets under management annually This is one of the original robo-advisors. Betterment lead the pack with its robo advisor platform and it’s still popular today. We love its options – taxable and retirement accounts, not all platforms offer both. Betterment invests in ETFs after you answer the basic questions about your risk tolerance and goal timeline. You can even open ‘sub-accounts’ if you have multiple goals which makes goal tracking simple. Pros Access to advisors via mobile message even with its ‘basic plan’ You can open a free checking and savings account with your brokerage account (includes a debit card) Automatically rebalances your portfolio Uses tax loss harvesting to minimise tax liabilities SIPC insured 5 portfolio options (including a ‘flexible portfolio’ that allows you to choose your investments Cons Limited investment options You must sign up for the premium account if you want full-service advisor support (0.4 per cent annual fee versus 0.25 per cent for the digital plan) 8topuz Wealth Fintech Pricing: (free) Perfomance Based 8topuz offer are a leading , robo-advisor style software, for trading the FX market. AI-Based trading The 8topuz software is delivering an average yearly ROI of 21% over the last 3 years. They have a range of products to suit retail investors, institutions and traders who wish to diversify risk. Pros Solid Audited ROI of 21% per year for the last 3 years (up to 2021). Easily apply the software to any MT4 platform (MT5 coming) with guidance for those new to trading on how to do this. Trade the FX market using AI-Software. Totally hands-off and where needed, risk-managed (by humans, not Octopuses). Start with as little as $500. Cons You need an existing or new FX trading account with MT4 (MT5 coming) access to benefit from the system. Medium-long term investment outlook. Highest performing product (Dynamic) starts at $10,000. Wealthfront Pricing: 0.25 per cent of assets under management annually Wealthfront is another leader of the pack and was one of Betterment’s toughest competitors when robo advisors first came around. Wealthfront offers a feature Betterment doesn’t – financial planning. Wealthfront’s ‘Path’ programme is free. It helps you get control of your personal finances and carve a ‘path’ to retirement. Anyone can use Path but you’ll get better results if you also use Wealthfront for investing to reach your goals. Wealthfront automatically creates and maintains your portfolio, and provides plenty of advice to help you along the way. Pros Only a $500 minimum opening balance requirement Wealthfront diversifies across eight asset classes Automatically rebalances portfolios according to your goals and timeline Uses daily tax-loss harvesting Taxable and retirement accounts available Cons You can’t pick your own investments No access to human advisors Wealthsimple Pricing: 0.5 per cent of assets under management annually Wealthsimple started in Canada but is now available in multiple countries including the US. Like other robo-advisors, Wealthsimple invests your funds in low-cost ETFs to diversify your risk and meet your financial goals. They offer 3 portfolio types, which is somewhat limited compared to other options but they’re straightforward – Conservative, Balance, and Growth. It’s easy to see where you’d fit in the portfolios, but Wealthsimple still walks you through the process to make sure. Like most robo advisors, they use the to minimise risk and maximise reward. Modern Portfolio Theory Pros No minimum balance requirement Offers social responsibility investment options Automatically rebalances your portfolio if/when needed Automatically reinvests dividends to compound your earnings faster Access to human advisors when you need it Cons Higher pricing structure than most robo advisors No clear goal setting feature to help you stay on track to meet your goals Vanguard Personal Advisor Services Pricing: 0.3 per cent of assets under management annually You probably know Vanguard for its low-cost mutual funds, but today they are so much more. Vanguard has a great robo advisor, which is a cross between a traditional robo advisor and human financial services. If you’re a somewhat passive investor who wants more involvement in your portfolio, Vanguard Personal Advisor Services may provide it.  Unlike a traditional robo advisor, the sign up process with Vanguard starts with an interview with a human advisor. They work as fiduciaries (in your best interest) and help set up a portfolio that meets your risk tolerance and goal timeline. Pros 24/7 access to your account and an advisor is just a phone call or email away Customised portfolio based on your individual needs/wants, rather than fitting you into one of a few pre-made portfolios Invests in both stocks and bonds Have multiple accounts for different goals Cons You need at least $50,000 to use Vanguard Personal Services Commission fees are often higher since they invest in more than ETFs What Is the Right Robo Advisor for You? Think about the big picture. How much involvement do you want? Are you comfortable with a robo-advisor picking everything for you or do you want some say? Watch the fees closely and see how they’d affect your bottom line. Fees are inevitable on any platform, it’s how they stay in business, but the complexity of the platform and their investment options determine how much you pay. Determine your in making decisions and/or letting a platform do everything for you and choose with these situations in mind. If tax loss harvesting is a key factor for you, inquire about it before signing up with a robo-advisor as not all platforms offer it. investment risk level There aren’t any set contracts for any of the above robo-advisors so you could try a few, but it’s nice when you find one you’re comfortable with and can use for the foreseeable future.

The Best Robo Advisors for 2021

In a world where everything is connected to the internet, and yes I mean (NSFW), the threat of being hacked is always present. The most recent notable security leak was with Robinhood. everything Bloomberg reported that "Almost 2,000 Robinhood Market accounts were compromised in a recent hacking spree that siphoned off customer funds, a sign that the attacks were more widespread than was previously known" ( ). There seems to be a newsworthy cyber hack or data leak almost every week. Source Fortunately, there are a number of easy safeguards that you can implement to provide more protection. Here are a few that I would recommend, listed from easiest to implement to hardest. Note: This article may contain affiliate links 1. Block your Camera Every time you finish a video chat with a friend or a Zoom call at work, you need to block the camera lens on your computer. According to the FBI, "There’s a thriving market for illicitly obtained stills and video". The former FBI director, James Comey, recommended that we all should cover our webcams for security reasons ( ). This could easily be accomplished by tape, a post-it note, or one of these . Source plastic camera blockers 2. Mute your Laptop Mic Hackers don't always need video to find something useful. There are also opportunities to capture audio. Because of this threat, you should always have your computer's mic muted when you are not on a video call. 3. Limit your Public Data You would be surprised how many people have zero privacy restrictions on their Facebook profile and publish their entire employee and education history on LinkedIn. This information is a gold mine for hackers. You could be providing them answers to your password recovery questions. Not all hackers will impact you directly. Reading your public information can help them impersonate you or for money. Other risks include providing answers to the password security questions publicly. You can go into the security settings for all of these accounts and limit who can see your information. The safer option is always to delete the information. ask your relatives 4. Use a More Private Search Engine As amazing as Google's search engine is, there is one HUGE drawback of using it. It knows everything about you. Google knows the products you buy, your income, medical history, relationship problems, and what websites you may go on . afterhours Turning your browser to incognito mode erases your local browser history, but it does not erase Google's records of your web activity. The best way to prevent them from tracking your web activity is to use a different search engine. DuckDuckGo, a privacy-focused alternative, is not as good as Google for search results, but they are good enough the majority of the time. The best part is that their "privacy policy is simple: we don’t collect or share any of your personal information". This mission statement is on their if you scroll down. homepage 5. Enable 2-Factor Authentication 2-Factor authentication (2FA) means that any user who signs into your account must enter a password and confirm their identity via email, phone call, text message, or a random code-generator app. Because of , 2FA by text message is not as secure as it used to be. I would highly recommend using a random code-generator app whenever that is an option. I know that many financial institutions, like Fidelity and Wealthfront, offer users the option to authenticate via a random code-generator app. SIM swaps 6. Move Crypto Assets to a Secure Location Some crypto platforms, such as , allow you to move your crypto holdings into a more secure location. At Coinbase, these are called vaults. With crypto stored in a , as opposed to a digital wallet, it makes it harder for hackers to quickly withdraw any of your funds. Coinbase vault 7. Block Quick Money Transfers Financial institutions often allow you to lockdown certain accounts. This prevents a potential unauthorized user from electronically transferring money, shares, and assets to their own account. However, it could make it more inconvenient for you as well. I would at least take a look at the security settings options for your bank accounts. 8. Use a VPN VPN means virtual private network. They provide privacy and anonymity when you are online by masking your internet protocol (IP) address so your actions online actions are virtually untraceable. VPNs hide your browsing history, IP address, location, and the presence of your devices. Hiding this information helps protect data you send and receive from your devices and protects your privacy when it comes to web activity like googling advice on a medical condition ( ). When I say devices, this includes anything that can connect online, including your phone, tablet, or any "smart" object. Source Personally, I use which allows you to stream 5 devices simultaneously for $8.32/month. It allows your network to be hosted in dozens of cities and countries, such as Netherlands, Germany, and Hong Kong. I have also heard good things about . The entire setup only takes about five minutes. All you need to do is download the VPN software from the provider, open it up, and select which city you want to be rerouted from. If you want more options on providers, this provides a good starting point. Express VPN Proton VPN page 9. Use a Password Manager Password managers are software that allows you to organize, encrypt, store, and retrieve your passwords for all of your accounts. You only need to remember the one master password. With a password manager, it makes it easier to use more complex passwords and change them on a consistent basis. Many of them can even generate random passwords for you. You can find a good overview of their benefits . I started using one about a year ago and find it a reasonable value. A familiar option is who recently launched their own password manager service. here Dropbox 10. Enable Firewall Protection at Home Firewalls are software programs or hardware devices that filter and examine the information coming through your internet connection per . If installed in your home, they can help prevent unauthorized users from accessing your WIFI network. While a basic wireless router provides a firewall, it only provides protection against rudimentary cyber attacks. If you want stronger protection and additional security features, then I would recommend purchasing a better firewall. Over the past few months, I have been looking into a that was recommended by one of my colleagues in IT. McAfee provider Parting Thoughts I would be a hypocrite if I didn't admit that I do not follow ALL of these safeguards. However, I have adopted an increasing number of them over the past few years. Most of these items are extremely affordable or provide very little disruption to your day-to-day life. If there is anything we learned this year, it's that some of the most dangerous risks are not visible to the naked eye. ~ The Data Generalist Image source: Unsplash

10 Cybersecurity Tips Everyone Should Follow

The COVID19 crisis has been playing out globally for over half a year, or almost a year counting its early phase in China. It’s been hurting a lot of sectors, but one particular sector stood to benefit — Fintech. First of all, the pandemic has significantly accelerated the adoption of contactless payments in the US, as it took banks and Apple years to convince shoppers to switch to contactless cards or use ApplePay while it had already been a trend elsewhere in the world. Moreover, many shops and shoppers have even made a 180-degree turn on their attitude towards QR-code, which many investors and experts used to heavily doubt to have a future in the developed markets in the US and Europe. Second, as offline shopping was dead, the skyrocketing demand in e-commerce has benefited many fintech companies in the online payment space. The “buy-now-pay-later” superstar Klarna’s recent fundraise put its valuation at over $10bn. Adyen’s market cap more than doubled since the beginning of the year to more than €47bn as of Oct 1. Square’s market cap even quadrupled to almost $75bn from its lowest point in late March. Third, with most people sitting at home, online banking and trading start to gain mainstream status competing against the incumbent traditional financial institutions. The dispatch of the US federal stimulus package has given neobank startup Chime the opportunity to acquire tons of new customers by pre-funding the stimulus to those who live paycheck-by-paycheck. In mid-September, Chime raised $485mn giving it an eye-popping valuation of $14.5bn. Meanwhile, Robinhood benefited from millennials and gen-z’s trading on mobile phone at home and achieved a valuation of almost $12bn in September, even as the incumbent Morgan Stanley acquired the mighty E*Trade for $13bn and another giant Charles Schwab purchased TD Ameritrade for $26 bn. The pandemic has certainly triggered a lot of buzz for fintech companies to take advantage of, but how much of the tailwind is ephemeral? How can we know which of these trends are here to stay in the post-COVID world? More importantly, what are the fundamental trends that can sustain the long-term vision of these fintech stories? First of all, the buzz of mobile and online financial services is far more than just bringing offline experiences to the virtual world. In fact, it involves a much more radical change in the business model. Traditional financial services can easily build an interactive website or an app to appear millennial-friendly, but it’s much harder for them to re-invent their risk management and operations for the new age. For example, a friend of mine was kicking off his own startup last month, and the process involves setting up a bank account to take in investor’s money. Since her personal bank account is with Chase, naturally she was thinking about opening the commercial account with Chase. So she tried the registration process on Chase’s website. While the website’s design and interaction looked cool and tech-ish, it was clunky in so many ways. Not only did she have to re-enter much of her personal information again, but after 20 mins of filling out the details, she was still not able to set up an account via the website and was instead asked to go to a local branch — the closest of which being 3 miles away as the closer ones were closed down during COVID. Later, she found out that Chase only allows setting up a bank account via website for LLCs, not for C- or S-corps. It would have been much easier if Chase made it clear on the website, and also, Chase’s old-fashioned risk management system forced the unnecessary difference in how it can treat LLC vs a Corp. Furthermore, my friend was told that even if the new company has already been incorporated and has a legit EIN, Chase still requires the proof of filing with the local Secretary of State, which has a backlog of 1 month in California under the impact of COVID. So instead of wasting another month to close the funding round, she went with a neobank startup Mercury and managed to open a corporate bank account within 2 days. For any old banks to seriously think about compete against fintech startups, they will have to consider which part of their back-office logic, risk assessment, and operational flow should be completely redesigned and rebuilt with the help of tech. Again, it’s much more than just a fancy website or app. Second of all, fintech companies’ strategy should focus on how they can fundamentally disrupt the traditional cost structure, instead of tricking consumers with no real cost-saving. Many startup ideas centered around taking for granted what interest rates they can charge as “market rate” and charging consumers (invisibly but effectively) more. One of the fundamental reasons behind the take-off of many lending fintech startups is the fact that millennials and gen-z’s grew up after the 2007–2008 financial crisis and don’t trust financial institutions with their credit system. Thus, they tend to prefer debit cards over credit cards, partially for the sake of goodwill and reputation, but with the burden of student debt and sometimes even mortgage, they find these lending apps quite handy. With 60% Americans having less than $400 in their bank accounts — and btw that number has got to be outdated since the COVID crisis — no surprise they need financing, in the form of either buy-now-pay-later or payday loans. Besides, with the insufficient level of mathematical and financial literacy, most people can’t mentally calculate the effective annualized interest rate when they are charged $5 or $10 every time they loan out just a few hundred bucks or advance their paychecks. It seems to be just coffee money or beer money. Many startups claim to have genius machine learning and artificial intelligence models, but few have proven to work better than the commonly criticized FICO scores. So instead of competing on data science, it’s basically a battle of who has the better marketing strategy to acquire the larger consumer mindshare. A potentially drastic shift comes from payroll startup Gusto’s new product Gusto Wallet, which allows salary employees to flexibility adjust paydays without being charged — effectively a free payday loan. This is a product that’s really beneficial to the financial wellness of the underpowered population. To be able to afford to forgo the lucrative interest payment, Gusto is in a unique position compared to many banks and fintech companies, as it sits directly between the employees and their salaries. Many banks spend hundreds of dollars trying to convince their account holders to add direct deposit, while Gusto controls that direct deposit endpoint. From this gateway, Gusto has the potential to add on more financial service products and controls more distribution channels. In the end, finance is a game of distribution, and the role of data/algorithms is to make that distribution more effective and efficient. In the traditional world, given lack of data and transparency, many investment funds with poor return track records still manage make money from commission, as long as they can maintain good relationships with financial advisors which shielded them from individual investors. The earlier ETF revolution and more recently Wealthfront / Robinhood solved the transparency and accessibility problem but cannot solve the curation and selection problem, which is at the core of the distribution game. Perhaps a peek at the allocation of the upcoming Ant Group IPO can offer some insights into the future of the distribution game. As a completely new IPO allocation model, the Alipay wallet opened up Ant Group IPO allocation to any individual Alipay user starting as low as 1RMB via a group of 5 mutual funds selected and curated by Alipay. Within 2 days, 3 of the 5 funds were already fully subscribed, each fund with a cap of 12bn RMB (about $2bn), breaking all public fundraising records. This highly innovative curation/distribution model is underpinned by the unmatchable financial and transactional data that Alipay has via its connection with Alibaba the largest ecommerce platform in China. It remains to be seen which fintech companies in the US can win the data war against the large banks, who are finding a hard to realize the full potential of the vast data they possess. The fintech landscape in the US is a lot more segmented than in China, so the picture may become clearer as we see more partnership and consolidation among the fintech superstars.

Fintech Should Focus On Long-Term Vision, Not Short-Term COVID Buzz 

Following the crypto hype-cycle of 2017–18, it’s safe to say that the industry has made some progress. There is now a spectrum of crypto-enabled financial services available; from stable coins, synthetic assets, peer-to-peer insurance, and peer-to-peer borrowing and lending, to name a few. Crypto-enabled financial applications — coined Decentralised Finance (DeFi) — are challenging the established order of centralised financial services in ways that unlock new income-generating opportunities that are more open and accessible to everyone. At its core, financial services are multi-sided marketplaces that are typically coordinated by banking intermediaries. ‘Financial assets’ typically make up the supply-side and ‘buyers’ or ‘borrowers’ form the demand side. In today’s low-interest-rate environment, ordinary people who deposit their money in a bank account no longer can make any money on their savings; especially when you have to also take into consideration the intermediary fees needed to keep the banks afloat as well as inflation. Through removal of rent-seeking banking intermediaries thanks to crypto-economic game theory, DeFi aims to offer a silver lining. DeFi is making it incredibly easier for anyone in the world to access the financial services industry in a permissionless way and reap the benefits as either or supply-side and demand-side contributor to its full extent. Income-generating opportunities for supply-side participants can be more fruitful in comparison to the legacy system since less of the available margin is used to cover the costs of paper-based settlement processes and remunerating profit-seeking intermediaries. However, the buck doesn’t stop there. More recently, these income-generating opportunities have risen far greater than just a few basis points better than the legacy financial industry. DeFi service providers — that exist as protocols residing on the Ethereum blockchain — have begun issuing their own digital tokens and gifting them to their existing and new users to entice growth. These “governance tokens”, typically have the nominal purpose of giving owners a say in how the specific DeFi service is run. Since these tokens have real utility (with very similar qualities to holding shares in a company), they can be considered valuable, on a case-by-case basis. The introduction of these application-specific governance tokens has, therefore, catapulted the income-generating opportunities available in crypto to new all-time highs. Resultantly, this has triggered a hot new trend, termed “yield farming,” which is shorthand for creative strategies where users of these protocols participate in inventive ways to earn as many of these tokens as they possibly can and maximise their dollar-denominated returns. Upwards of 1000% APR in some cases sounds like spellbinding stuff. But, how many people do you actually know who are taking advantage of yield farming that DeFi have to offer? According to a , less than 1% of the world’s population own cryptocurrency at all. And despite rapid growth, only of is collateralised in . study by Cambridge University 0.0024% global wealth Decentralised Finance (DeFi) services So, if DeFi is our financial future, then why still are so few of us taking part? Where DeFi and Yield Farming Falls Short To change an individual’s financial habits, it would be prudent to assume that any new proposition should either be more rewarding and/or less risky than the status quo. When we consider how rewarding some of these new yield farming opportunities are, at first glance, the rates appear rather compelling. However, when you consider the time investment for an average DeFi novice in education, trial and error as well as the risks involved with moving their wealth into a smart contract that they do not understand how to assess, the reward is simply not big enough. Even the crypto-veterans are struggling to keep up. Given that this space is evolving at warp speed, new yield farming opportunities are popping up daily. Crypto-veterans need to be quick to (1) Assess the risks involved; (2) Assess the expected return on investment in comparison to their existing portfolio; and (3) rebalance their portfolio accordingly to ensure risk/reward is optimised for. All of which is complex, time-consuming and prone to human error. image credit: @sassal0x Not mention the rising gas costs necessary to perform a transaction on the Ethereum network. The technical limitations of Ethereum are pricing out a lot of the target market user groups. The result is a negative feedback loop that deepens the inequalities of wealth and income in DeFi, as the new income-generating yield farming opportunities that DeFi has to offer are inaccessible to those that have smaller sums of money to play with. This cycle threatens the long-term sustainability of DeFi, potentially impacting the incentive for new consumers and businesses to participate, and dampening the viral potential of crypto-economics. Yearn Finance — DeFi’s Saving Grace? Yearn Finance’s meteoritic rise has been a rapid response to these compounding problems in DeFi through its introduction of ‘yVaults’. yVault menu @ yearn.finance yVaults work by allowing liquidity providers (LPs) to deposit their crypto-assets in a specific pool directly. The robo-advisor designated to the yVault would then invest the capital from the pool across the best yield farming opportunities available to the specific crypto-asset. yVaults essentially introduce automated investment strategies, serving to abstract away a lot of the complexities that made yield farming difficult to optimise for. Consequently, Yearn Finance has become the largest yield farming enterprise in crypto, managing to help more individuals take part in the sorts of investment activities that were once available only to the more sophisticated and affluent users. Finding Product-Market Fit Yearn Finance has certainly lowered the barrier for yield farming across a variety of crypto-assets. yVaults have given birth to a powerful new tool that allows users to take full advantage of when trying to maximise the return on the crypto-assets in their possession without the headache of constantly rebalancing their positions. So, has Yearn Finance’s yield farming optimiser found product-market-fit? For crypto-veterans with a pre-established understanding of cryptocurrency and the DeFi landscape, it most certainly seems so. However, if we were to zoom out, it is fair to say that Yearn is far from truly taking yield farming “mainstream”. We believe, as wonderful as solution Yearn is, it is not built to serve two specific target customer groups that arguably form the lion share of the total addressable market: (1) ; and DeFi and cryptocurrency novices (2) . Non-DeFi-focused institutional investors To understand why, let’s break the problems down individually: — If a DeFi novice goes to the Yearn site and see all these options on the front page: Vaults, Earn, Zap, APR and Cover they’d have no clue where to start. In addition to bombarding the users with an array of different DeFi products to choose from, each of them needs a specific crypto-asset, e.g. ETH, USDT, USDC, Curve, etc. For a crypto novice, choosing what to deposit and why is part of the challenge. It demands users having a bullish or bearish thesis on the underlying crypto-assets themselves. The user experience is still too complex — While Yearn makes it easy and cost-effective to invest in an array of protocols and reap the rewards of yield farming by investing in a yVault, the process of getting the specifics crypto-assets necessary is itself a challenge that demands users to make several transactions that can still cost significant amounts. Additionally, the fragmentation of liquidity across all of the different yVault pools prevents reaping the full benefits of diversifying gas fees among the providers of pooled capital. Gas fees still price people out — Yearn may abstract away some of the complexities involved in rebalancing yield farming investment strategies; however, it does not provide transparency over the risks of investing in a particular strategy. Investors are expected to audit the financial and technical risks for themselves. For crypto-novices as well as more sophisticated institutional investors, this is time-consuming and demands a trained eye to conduct. Allocation still demands due diligence — Since strategies and the corresponding protocols that they interact with are not vetted or scored in a standardised fashion, it is unclear whether the investment strategies offered by Yearn itself offer the best return for a given level of risk. As an institutional investor, balancing risk and reward is of paramount importance. Should a given strategy employed by a yVault fail to satisfy the risk/reward assessments, investors will be unable to allocate a meaningful amount of their capital to the strategy to reap the full benefits of automated yield farming. Investments are not optimised for risk — Yearn Finance does a fine job at rebalancing a portfolio for a given strategy with a specific input asset. However, what it fails to do is add a layer of rebalancing abstraction to ensure that the risk-adjusted yield is optimised for across the available strategies. Today, users of Yearn Finance are expected to manage this for themselves manually. Additional rebalancing is necessary all The Market Needs a ‘WealthFront’ for Yield Farming While Yearn Finance has gained a lot of traction relatively quickly, its ability to break yield farming into the mainstream remains uncertain, given the complex-set of features it offers that are catered to the more advanced users. However, for DeFi and yield farming to truly penetrate the crypto-novice and passive institutional investor target demographics, additional layers of abstraction are necessary. In the legacy financial world, automated investment service providers have made it incredibly easier for ordinary individuals to invest in a wide variety of investment strategies based solely on their risk tolerance profile. Companies such as WealthFront, Betterment and Acorns have been proven to be successful in attracting idle capital from the average joe. Since ‘yield farming’ has only really emerged in the past few months, there are very few players out there today that aim to simplify the experience in a way that is comparable to the likes of a WealthFront. Should a product of this sort emerge for the yield farming phenomenon, it could have the power lower barriers to entry even further, satisfying the needs of mass-market users. APY Finance — a viable contender? Aiming to fulfil the role of “WealthFront for DeFi” is a new kid on the block — APY Finance —  a project that is set to launch in October. Founded by a talented group of developers at ETH HackMoney earlier this year, APY Finance proposes to offer investors a way to automate yield farming similar to the likes of Yearn, however, with some additional layers of abstraction. It achieves this through: — instead of users having to purchase an array of different crypto-currencies to invest in one or several vaults, they can simply make a single investment in APY Finance’s liquidity pool. In turn, the APY robo-advisor takes control and autonomously diversifies the capital collected in the pool across an assortment of strategies that may require alternative cryptocurrencies as input assets, e.g. ETH, renBTC, USDT, etc. 1. Accepting only stable coin deposits — APY Finance uses a to assess each of the investment strategies it employs in the back-end to score smart contract risk, financial risk and centralisation risk. By doing so, APY Finance’s robo-advisor gains a degree of consciousness with regards to risk, allowing it to make more calculated decisions on behalf of the LPs. 2. Scoring and analysing yield farming risks on behalf of the LPs risk assessment framework inspired by ConsenSys — Yearn Finance only allows users to invest in cryptocurrency-specific vaults; it does not offer the ability to move the capital from one vault to another in an automated way. APY Finance aims to abstract away this complexity through automatic rebalancing of all the strategies employed concurrently. 3. Rebalancing the portfolio of strategies autonomously — One of the many beauties of DeFi is its composability. Since Yearn Finance offers a variety of yield-optimising investment strategies, APY Finance can incorporate each of them into its own robo-advisor. Diversifying capital to one or several Yearn yVaults could theoretically be made possible, should the system believe it offers the best risk-adjusted return for the pool of capital. 4. Interoperating with Yearn Finance and other strategy-specific robo-advisors An Overview of How APY Finance Works — Yield Farming’s Upcoming Money Lego Piece Conclusion While becoming the subject of a fair share of speculation, crypto veterans believe yield farming and DeFi are part of a large and permanent expansion of their industry as it has the power to draw in financial capital in search for yield. With the explosion of liquidity mining campaigns offered by a variety of new and existing DeFi protocols, Yearn Finance offers an easier way for users to automate several aspects of their yield farming endeavours. However, given the need to jump through several hurdles to utilise Yearn efficiently and safely, the products offered are in reality serving only the savvier DeFi users.  Until a new product emerges that caters to the novice or more risk-averse investors among us, I believe strategy-specific yield optimisers offered by the likes of Yearn will struggle to attract and retain mass-market users. My view is that those that will capture the lion share of the total addressable market will be those that offer an experience similar to the likes of WealthFront. APY Finance looks like a promising contender; I’ll be watching. Full disclosure: I am an investor in Yearn Finance (YFI) and APY Finance (APY).

What "Yield Farming" Needs to Take DeFi Mainstream

Power users drive some of the most successful companies — people who love their product, are highly engaged, and contribute a ton of value to the network. In ecommerce marketplaces it’s power sellers, in ridesharing platforms it’s power riders, and in social networks it’s influencers. The importance of power users All companies want more power users, but you need to measure them before you can find (and retain) them. While DAU/MAU — dividing daily active users (DAUs) by monthly active users (MAUs or monthly actives) — is a common metric for measuring engagement, . it has its shortcomings Since companies need a richer and more nuanced way to understand user engagement, we’re going to introduce what we’ll call the “Power User Curve” — also commonly called the activity histogram or the “L30” (coined by the Facebook growth team). It’s a histogram of users’ engagement by the total number of days they were active in a month, from 1 day out of the month to all 30 (or 28, or 31) days. While typically reflecting top-level activity like app opens or logins, it can be customized for whatever action you decide is important to measure for your product. The Power User Curve has a number of advantages over DAU/MAU: It shows if you have a hardcore, engaged segment that’s coming back every day. It shows the variability among your users: some are slightly engaged, whereas others are power users. Contrast this with DAU/MAU: it’s a single number and so blurs this variance. When mapped to cohorts, Power User Curves let you see if your engagement is getting better over time — which in turn helps assess product launches and performance of oher feature changes. Power User Curves can be shown for different user actions, not just app opens. This matters if the core activity that matters for your product is deeper in the funnel. In other words, while the DAU/MAU gives you a single number, the Power User Curve gives entrepreneurs several avenues of analysis to assess their product’s engagement to the most addicted users — in a single snapshot, over time, and also in relation to monetization. This is useful. So how does it work? The Power User Curve will “smile” when things are good The shape of the Power User Curve can be left-leaning or smile-like, all of which means different things. Here’s a smile: The Power User Curve above is for a social product, and shows the characteristic smile shape that indicates there’s a group of highly engaged users using the app daily or nearly daily. Social products with frequent user engagement like this lend themselves well to monetization via ads—there’s enough users returning frequently that the impressions can support an ad business. Remember that Facebook would have a very right-leaning smile, with 60%+ of its MAUs coming back daily. What matters is that, over time, the platform is able to retain and grow its power users: successive Power User Curves should ideally show users shifting over more to the right side of the smile. As the density of the network grow, and with stronger network effects, it’s expected that there’s more reason for users to return on a daily basis. Let’s look a different example, which doesn’t smile: The Power User Curve can show when strong monetization is needed This Power User Curve of a professional networking product looks quite different than that of a social product. It’s left-weighted with a mode of just 1 day of activity per month, and decays rapidly after those few days. There’s no power users. But this light engagement can be okay — not every company needs to have a smile-shaped Power User Curve, just as not every product category necessarily lends itself to an ultra-high DAU/MAU. When there’s low engagement, what matters is that the company has a way to extract enough value from users when they areengaged. Think about an investing product like Wealthfront or networks like LinkedIn — few users are likely to actively check it on a daily basis, but that’s ok, since they have business models that aren’t tied to daily usage. CEOs of such companies should therefore,think about: Is there a way to create revenue streams where the business can still monetize effectively despite users’ infrequent engagement? Or, who are the users using this product more frequently, and how can I get more of them? Is there something about the product — e.g. onboarding, the core experience, etc. — where a significant chunk of the user base isn’t experiencing the ‘aha moment’ that makes them “get” the product, and therefore not getting value from it right now (and if so how to get there)? Some products should be analyzed in a 7 day timeframe – like SaaS/productivity – and others on 30 days Another flavor of the Power User Curve is a histogram of users’ engagement for a 7-day period, also commonly called L7. The 7 day Power User Curve shows weekly actives, not monthly actives. Plotting this version can make sense if your product naturally follows a weekly cycle, for instance, if it’s a productivity/work-related product that users engage with Monday through Friday. B2B SaaS products will often find it useful to show this version, as they want to drive usage during the work week. Note that using DAU/MAU wouldn’t be the appropriate metric for this product as it’s not designed to be a daily use product. You can also see there’s actually a smile curve through 5 days, but fewer users are using it 6-7 days, which makes sense for the power users of a workweek product like this. CEOs of such product companies should therefore want to understand: Who are the users engaging just 1 or 2 days each week? Are there certain teams or functions within an organization that are getting more value, and how can I build out features to capture the teams with less engagement? Or, if the product is really driving a lot of value for specific departments — how can I understand their needs better and make sure we continue building in a direction that supports their daily workflow (and that we can upsell new features)? Plotting the Power User Curve for different WAU or MAU cohorts can also be very insightful. Over time, you can see if more of your user base are becoming power users, by seeing the shift towards higher-frequency engagement. The trend of over time can show if the product is getting more engaging over time Here’s an example: The Power User Curve for MAU cohorts from August through November shows a positive shift in user engagement, where a larger segment of the population is becoming active on a daily basis, and there’s more of a smile curve. You can see when the line starts to inflect in order to see when a critical product release or marketing effort might have started to bend the curve.  This might be a place to double down, to increase engagement. For a network effects product, you might expect to see newer cohorts gradually improve as you achieve network density/liquidity. On an ongoing basis, you can measure the success of product changes or new releases by looking at different cohorts’ Power User Curves. If a product unblocks a bunch of features for power users, you might see a gradual increase in power users. The frequency histogram can be keyed on actions beyond the visit — did someone show up or not — you can also go with deeper user actions. For instance, you may want to plot the core activity that maps closely to how your business is monetized… or that better represents whether users are getting value from your product. This is important because it forces you to think about what really matters to measure. The Power User Curve can be based on core activity, not just app opens or logins The above chart for a content publishing platform shows the total number of days in the month users posted content. A lot of products have smile-shaped core activity Power User Curves, because while most people tend to contribute lightly, there is a small contingent of users who are power users. Think of the distribution of Youtube creators, or Ebay sellers, or even how often you post on Facebook. As the CEO or product owner of a platform like this, it’s important to design the platform such that the everyone has a chance to succeed. On Facebook, the news feed algorithm makes sure that if you feel strong affinity to a person or organization, you’ll still see their posts even if the sheer volume of other content (for instance, from more prolific media companies) would otherwise drown it out. On OfferUp, even if I seldom sell items, when I do list something, their algorithm makes sure that it’s surfaced to the relevant potential buyers. Not everything is a daily use product, and that’s okay. Why does this all matter? Power user analysis allows you to get a better understanding of how users are engaging with your product, and make more informed decisions using that data. That might mean choosing an appropriate business model that works for your pattern of engagement, or designing better re-engagement loops for lower-engaged user segments, or doubling down on use cases that your high-engagement user base is already getting value out of. The beauty of the Power User Curve over DAU/MAU is that it shows heterogeneity among your user base, reflecting the nuances of different user segments (and therefore what drives each of those segments). Creating versions of Power User Curve by various user segments can also be particularly insightful. For instance, for a business with local network effects (like Uber or Thumbtack), showing Power User Curves by market can reveal which geographies are developing density and strong network effects. Power User Curves show if your product is hitting a nerve among a super engaged core group of users, even if perhaps the overall blended DAU/MAU is low. It also doesn’t have to just reflect app opens or logins — you can hone in on an action that maps closely to users getting specific value out of your specific product and plot the Power User Curve for that action. The key for founders is to know that there isn’t a single silver bullet to measure perfect engagement — rather, the goal is to find the set of metrics that are appropriate for their businesses. Comparing the Power User Curve of a social app vs. a work collaboration app doesn’t make sense, but looking at your own Power User Curve over time, or finding benchmarks for your product category, can tell you what’s working… and what’s not. Originally published as “ " The Power User Curve: The best way to understand your most engaged users

What to Learn from the Power User Curve

What is a Robo Advisor? First and foremost let’s get our definitions together. Robo Advisors a.k.a automated investment advice tools are online platforms that through a digital risk assessment questionnaire determines the risk suitability of investors and based on that risk category, they propose an appropriate investment portfolio. These investment portfolios are for example constructed using , a Nobel prize-winning method introduced by Harry Markowitz. Then via online portals or mobile apps, investors get to receive a real-time valuation of investment portfolios. mean-variance Most Robo Advisors charge based on a percentage of the assets they are managing, i.e. 0.75% of portfolio value. This practice is regulated and requires a license. The first Robo Advisor was introduced by John Stein, the CEO and co-founder of . The firm is one of the most successful and well-known Robo Advisors up to this day. Betterment Initially, Robo Advisors were designed to automate the process of investment management with a passive approach to it. Robo Advisors aims to reduce the operational costs hence the fees investors pay for portfolio management. They did successfully accomplish that. According to reports Robo Advisors’ market share by 2020 is expected to be USD 2.2 trillion. What is the current situation worldwide? Robo Advisors as a service has been used on a global scale. Though, there is definitely a different scene running in different parts of the world, for instance comparing the US market with Europe. The US retail market has shown much more interest and trust in using these computer programs to manage their money. This has alone made the US the source of innovation for Robo Advisors considering the competition between some heavyweight financial institutions trying to take a bite from the market share such as Vanguard or Charles Schwab and very bright startups such as Betterment, Wealthfront and Acorns. In Europe, not so much, yet. The UK is perhaps the leading market with the presence of Nutmeg, Moneyfarm and Wealthsimple. Across other countries in Europe, German’s Scalable Capital is the biggest player, with EUR 1 billion in assets under management compared to USD 16.1 billion (EUR 14.47 billion) managed by Betterment. Industry experts speculate that 2020 is to be the year when there will be more launches of hybrid and fully automated Robo Advisors in Europe. Whether they will be successful really depends on their go-to-market plan and learn the hard reality from the Robo Advisors graveyard that customer acquisition COSTS. Startups vs Incumbents Though we have witnessed more retails banks getting involved and launching an automated investment management service for mass affluent investors (customers with having less than USD 100K of investable funds). The service is being delivered as part of the online/mobile banking app. Another entry channel that can be seen with the market is the joint cooperation between some of the neobanks with online advice tools. N26 customers can integrate their accounts with Ovalmoney and invest their funds into some Exchange Traded Funds (ETFs). Although Ovalmoney is not providing financial advice per se, it makes investment portfolios (ETFs) available for its users, but the concept of such collaboration potentially could be seen more across the market. Robo Advisor for Cryptocurrencies? The past, present and future of Robo Advisors are analyzed by research institutes and there are already many research papers and market analyses available. We want to answer a more challenging question: does the Cryptocurrency market also need a Robo Advisor? One common attribute amongst all Robo Advisors is the passive nature of them, they are meant to be managing investors’ assets very cautiously with minimizing the risk to maintain a solid, continuous and long term returns for investors. This statement alone could reject the idea of having Robo Advisors in the crypto world, considering the wild nature of Cryptocurrencies with high volatility and unexpected fluctuations. But hold on, there is more to it. Robo Advisors in the capital market are hugely bundled with ETFs. All ETFs contain a basket of investments that can include stocks and bonds. An ETF typically tracks an underlying index such as the S&P 500 but can follow an industry, sector, commodities, or even currency. An ETF price can increase and decrease just like other investments. These products trade throughout the day just as a stock would trade. ETFs are put together to have controlled risk and provide underlying shares to investors with lower costs and lower fees than the assets included in the basket. All together, Robo Advisors and ETFs were a match made in heaven and each contributes to one another’s growth. So you are probably thinking about it already, we need to wait until we have ETFs-like investment vehicles in the Cryptocurrency market and then we can say Robo Advisors can enter the Cryptocurrency world. No, this is not when we end this article. What if there are ETFs-like instruments in the Cryptocurrency market? Digital Asset tracking instruments There are very similar products to ETFs that are called (ETPs). These instruments track underlying securities, an index, or other financial instruments. ETPs also trade across exchanges like stocks meaning their prices can fluctuate from day-to-day and intraday. Exchange Traded Products ETPs can be benchmarked to myriad investments including commodities, stocks, bonds or Cryptocurrencies. However, the prices of ETPs are derived from the underlying investments that they track. The low-cost structure of ETPs has contributed to their popularity. In December 2019 a series of regulated cryptocurrency ETPs have been listed for investors. Amun technology a company focused on creating digital asset tracking has received the required license to list their cryptocurrency-based ETPs. Investors can invest in crypto ETPs easily, safely and in a regulated framework. EU member state regulator has cleared a base prospectus filed by the firm. With that, EU retailers who have access to the Swiss SIX and Germany’s Boerse Stuttgart exchanges can now trade various crypto-based ETPs offered by Amun. One challenge that remains for the market and the ETP providers is to keep liquidity for the indices they launch. Market liquidity across Cryptocurrencies, especially alternative coins (all non-bitcoin coins). There are specialized parties, called market makers using sophisticated tools for providing offers for both sides of order book. The tool, called also makes sure make sure such coins or indices have sufficient liquidity to attract investors or financial advisors. market making bot Regarding the trading automation in crypto space this is developing very rapidly with many different that improve the trading operations of this alternative asset class. crypto trading bots What about technology? A well-integrated, modular platform that has an open mechanism for further integration and customization might be needed to finally push this idea of crypto Robo Advisor. It sounds complicated, but the solutions already exists. The integration to the market as well as the ability to include a variety of financial instruments within the custom made portfolios are what is required to deliver cryptocurrency-based instruments. With the likes of Empirica’s white-label Robo Advisory solution that is built on top of algorithmic trading platform that plays the role of a bridge that connects our Robo Advisory solution to broker/custodian and market data providers. Technically all portfolio management configuration, risk assessments and rebalancing are done through the Robo Advisor components and through the it automatically sends the orders for designated investors and once successfully executed. Then the algorithmic trading platform sends the information back through our APIs and portfolios are updated. algorithmic trading software Price measures(a sale above the bid price, or a buy below the offer price) is also very important for automated portfolio management. Robo Advisor technologies that are equipped with monitor execution of all orders across different trading venues and determine whether investors receive the best possible price at the time the trade is placed. smart order routing What about custody? Each Robo advisors have a custodian bank that actually holds investors’ money. Custodians add an extra level of security and regulation. Custodians are specialized financial institutions responsible for safeguarding a firm's or individual's financial assets. Is there any custodian that supports Cryptocurrency? There are cold storage custody services in the Cryptocurrency market. Most famous ones are offered by rather bigger Cryptocurrency exchanges such as Coinbase and Gemini. There are two main issues with such custody services, one is that within the traditional market custody services providers allow third-party systems like Robo Advisors to create custody accounts for investors via API and Custodies like Gemini and Coinbase do not. The second issue comes with API enabled executions which cold storages at this point do not provide that access, yet. With the news of crypto ETPs on Six Group from Switzerland, we know the custody service from here is also sorted out. SIX SIS is the central securities depository for the Swiss financial market, while also acting as a depository for international securities. It also offers issuer, clearing and settlement services as well as asset servicing in a variety of combinations. On the other side of the world, the Japanese bank Nomura has also been preparing to launch a custody service for digital assets in partnership with Ledger. Their solution is predicted to launch next year. Germany also recently passed a law, effective Jan. 1, 2020, which would allow authorized companies to offer crypto services, including custody. Final words The three main criteria for Cryptocurrency Robo Advisors to operate are listed in this article: - risk-controlled and low cost instruments like the ETPs, - the technology with an open mechanism for integration and portfolio construction and - custodial service to run secure and regulatory-friendly operations. Seems like the pieces are there to complete the puzzle. Ideally, a combination of digital ETPs and traditional ETFs into a single portfolio would be the goal to balance out the risk as well as not missing the opportunity on the exciting Cryptocurrency market. We do think the crypto market needs a Robo Advisor, perhaps the entrance could be either a new launch with a combination of assets with non-digital assets or the current Robo Advisors will start including Cryptocurrencies as part of their portfolio offerings. ( Disclaimer : The authors, Hanif and Michal, are working at Empirica)

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