Five top fintech offerings: Miss Mackay's Money Microscope

Holly Mackay is the MD of Boring Money and holds 18 accounts with investment platforms and 'Robo Advisers'. She invests her personal money and reports back on the user experience, warts and all.

When we think about how technology might transform our lives, it's easy to jump ahead to the realm of driver-less cars and polite robots doing our ironing. But there's a whole industry growing up around the opportunities to make technology work for finance, known as 'fintech'.

Boring Money HQ is in London's so-called 'Silicon Roundabout' in Shoreditch, heart of fintech land - and there is a bubble of energy, start-ups, Banksy street art and people who self-describe as disrupters and even 'gurus'. Fintech is hot.

Although many developments have yet to engage any mass market, there are increasing numbers of fintech firms that offer smart (or at least interesting) alternatives to the more traditional status quo. Here are five I like.


A different way to borrow and lend, cutting out the traditional bank

Founded in 2005, Zopa is a peer-to-peer (P2P) lender that cuts out the traditional bank as middleman. From the early days, co-founder Giles Andrews fought to get P2P lending authorised by the regulator as part of a drive to establish consumer trust and confidence.

Early efforts have paid off and 2016 will see the introduction of the Innovative Finance Isa, to include P2P. The march towards the mainstream continues.

In 2014 Zopa lent £280 million; it counts 110,000 borrowers and 59,000 lenders in its customer base. If you're prepared to tie up your money for four or five years, the average lending rate is around 5 per cent.

The firm claims to mitigate risk by not lending more than 2 per cent of any total loan to any single borrower. Their online calculator told me I could lend £2,000 for five years at 5 per cent, offering a projected value of £2,553 at the end. The service has struck a chord, with over £1.15 billion lent since launch.

Alternative options in this space are crowd funders Seedrs and Crowdcube, which offer customers equity in developing businesses, not debt.

The P2P space is set to become more mainstream. Dominant broker Hargreaves Lansdown is building a peer-to-peer service with a target launch date of next autumn.


A colourful debit card for kids

This is an interesting option for parents/grandparents who want to teach their children about budgeting and saving in an accessible and digital way.

Founded in 2012 by former maths teacher Alick Varma, and powered by a prepaid Mastercard debit card, Osper is a mobile banking service for eight to 18-year-olds.

It's still in its early days, but parents are loading more than £1 million onto the cards every month as pocket money for digital kids. The service costs £12 a year.

My son is not very interested in maths, and money 'comes from a bank' - a magic bank with an endless supply of tenners - so there's some work left to do on that education front. However, he was so pleased with his Osper card when it arrived that he took it to bed with him that night.

This is also the first sign that he might actually grasp fractions and percentages, as it dawns on him that his current balance of £10 is only about 5 per cent of an XBox game console.

Alternative options for children's debit cards include goHenry, which runs off Visa, costs £1.97 a month and claims to have more parental controls than its competitors.


A good starting point for younger and less confident investors

True Potential is an advice firm run by savvy Geordies, with a good track record of taking emerging technology and implementing it more effectively than bigger brands.

Impulse Saver is an app that allows spur-of-the-moment saving and is linked to an online DIY wealth management service. I have a test account set up for research purposes, and my small pot of money is invested in an underlying passive 7IM multi-asset fund.

Set and forget. New customers are asked several questions to identify a risk profile, and each risk profile has a choice of between three and seven managed funds.

I get a monthly text with my balance, there's a decent app to tell me what's going on and yes, you can Impulse Save a hasty 10 quid after a naughty Impulse Buy.

So far over £24 million has been invested this way, and over a quarter of the transactions are for less than £10. Particularly fun is the statistic that, since launch in 2014, there have been eight Impulse Saves of more than £50,000. Go figure! Does this indicate a new customer segment of Impulsive Oligarchs?

So-called robo-advisers, more accurately described as digital investment services, are coming through thick and fast. Nutmeg is one of the most prominent, having spent a lot on marketing and growing the brand. Italy's MoneyFarm is the newest to the UK market.


A digital filing cabinet for your estate

Lexikin is described by founder Simon Stewart as 'the world's first digital executor'. Launched in September this year, the business provides a one-stop shop for people to create and manage their digital legacy.

Or, put more simply, it's somewhere to save photos, videos, passwords, messages for family, wills, legal documents and all of the other 'stuff' that is part of life in 2015.

Users can also get a will drawn up for £195, pledge money to charities in the Giving section and look at the network of associated private client services across law, insurance and wealth management.

Although it's not the jolliest of sales, this 'digital vault' is interesting. I'm yet to adopt but I suspect the journey quickly turns from a sentimental one to a practical one which would make things an awful lot easier, quicker and cheaper for surviving family.

Storing the 'soppy stuff' is free. Executors are charged £100 to gain access to administer probate and wishes. And at that stage, given some of the horror stories I hear, I'm guessing they would pay 10 times that.

Although there are no direct competitors, financial advisers I know rate Irwin Mitchell as a low-cost online will-making service. The Simplify Group offers a free online will-writing service linked to the NSPCC, which hopes to benefit from possible donations made by users.


Online and phone-based pension advice

The government, the regulator and the financial services industry have their collective knickers in a twist about what is dubbed 'the advice gap'.

In a nutshell, this is the impact of banning commission and introducing fees for advice, which means that those with relatively small sums of money cannot justify the hourly or project fee for advice.

So Mrs Average, with less than £100,000 to invest, is not typically seen as economically viable for a traditional face-to-face advice model.

This autumn the regulator has called for industry feedback to this problem as a consultation kicks off. Meanwhile, a number of online solutions, known as robo-advisers, have sprung up. But there's a problem: these automated online portfolios seldom give advice.

Launched in 2009, Wealth Wizards claims to be 'pioneering the development of expert online financial advice in the UK'. Robots and algorithms do the investment stuff, which will (in my humble opinion) become commoditised for non-enthusiasts.

Yet advice and planning - maximising tax efficiency, consolidating pensions without sacrificing valuable guarantees, not jumping tax brackets when taking tax-free cash, not running out of money in drawdown, and so on - will continue to be discussed in a more personalised way with an old-fashioned human being.

With fixed price options, such as £499 for a 'Pension Tidy Up' or £200 an hour to work with a Chartered Financial Planner, this feels like the future direction of travel.

Other advised options include Wealth Horizon or, for investments without the advice, look at Nutmeg or True Potential.

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