How Fintech is Disrupting the Modern Workplace

From the way payroll and benefits are administered to the nature of work itself, fintech innovation is helping build the 21st century workplace.

Will “pay day” be a thing of the past? How long until companies across the country are competing on the basis of their ability to help you pay off your student loans?

Technology has done much to change the nature of work in recent years. The same can be said for specific areas like financial technology. Here’s a look at how fintech innovations are making their own contributions to the 21st century “office”.

Getting Paid

Many of us work because we enjoy what we do. But whether you consider getting paid a top priority or just a perk, who wouldn’t love the flexibility of being able to get income when you need the money most – rather than on an arbitrary, twice a month schedule?

Companies like Gusto are among those making this possibility a reality. This summer, the payroll, benefits, and HR technology company introduced Flexible Pay, a new solution that enables employees to get paid on a date other than their employer’s standard pay date. Calling bi-weekly pay schedules a “relic” of the days when payroll taxes were calculated manually, Gusto co-founder and CEO Joshua Reeves has set out to prove that “with modern technology, employees shouldn’t have to wait weeks to get paid.”

The New Workspace

Even the word “telecommute” sounds more like something from a bygone time rather than the way a growing number of Americans are “going to work”. But the reality of remote employment for a growing number of people is here and fintech companies have both encouraged and participated in this trend. “Millennials simply don’t feel they need to be in the office, or at their desk, to get a job done — especially since the evolution of technology has made portability very possible,” Demetrios Gianniris, a director at MG Engineering, wrote for Forbes.com earlier this year in a post called The Millennial Arrival and the Evolution of the Modern Workplace.

To this end, innovations in mobile technology and messaging (consider Eltropy’s innovations in providing secure, compliant communications via popular messaging apps) have helped accelerate the revolution in remote work. There are also fintechs removing friction from some of the more mundane aspects of working outside the office. Expensify, for example, has partnered with Uber to make it easier for workers who use the ride-sharing service to separate business from personal expenses. And speaking of expenses, the tools offered by companies like Ondot empower workers to make necessary purchases while ensuring control and accountability for managers and employers.

Doing the Work

The flip side of the convenience that technologies like chatbots and IVR provide is that, for a growing number of financial professionals, these technologies are virtually co-workers. As machine learning and AI become increasingly commonplace, workers are more likely to rely on interacting with processes than communicating with people when it comes to getting their daily tasks done.

For financial advisors, fintechs are developing a wide variety of tools to make it easier for them to communicate with customers, and build highly personalized investment portfolios and financial plans. Onist, which announced a partnership with Quovo this summer, enables financial advisors to set up a virtual family office to facilitate collaboration between advisors and clients.

Technology also promises to make it easier for workers to leverage the work of other workers more effectively. One of the key insights of New York-based WorkFusion was the way a combination of machine learning and crowdsourcing of human talent could enable smaller businesses to “punch above their weight” when it comes to managing data. The company has since leveraged this technology to produce the first integrated RPA (robot process automation) and cognitive automation platform: Smart Process Automation (SPA) currently deployed in verticals including financial services, healthcare, and insurance.

Managing the Gains

Fintechs are in the lead when it comes to helping workers make better financial decisions. A firm like DoubleNet Pay helps employees manage cash flow by automating their billpay and savings obligations and coordinating payouts around paydays. Wealthucate, a financial wellness specialist out of San Jose, California, provides an automated financial wellness program that helps businesses enhance their own offerings. Wealthucate’s solution leverages gamification and personalization to increase the participation rate in benefit programs and help companies better explain their benefit offerings.

Among the more interesting ways that fintechs are helping workers manage their money is the approach by Student Loan Genius. This company enlists employers in the fight to help Millennial workers in particular pay off their student loans while simultaneously investing in their own employer-based retirement plan as soon as possible.

Fintech and the Work of the Future

It may be only a matter of time before we are able to watch the real-time flow of micropayments into our accounts or a be a part of a workforce in which most of us have both a robot supervisor and a robot subordinate. In any event, it is clear that whatever innovations the workplace of the future holds, fintech companies will be very much a part of making them happen.

Top image designed by Freepik

Finovate Alumni News

On Finovate.com

  • Wonga Raises $13 Million in New Funding.
  • TransUnion Teams Up with EXL for CECL Compliance.
  • RightCapital Adds Student Loan Functionality to its Platform.

Around the web

  • PasswordPing wins Startup of the Year at 13th Annual 2018 IT World Awards. See PasswordPing at FinovateFall in New York next month.
  • Zopa to finance loans for CommuterClub season tickets, courtesy of a new partnership.
  • Xero announces integration with GoCardless.
  • PYMNTS.com profiles payroll, benefits, and HR platform, Gusto.
  • MicroStrategy appoints Marge Breya as Chief Marketing Officer.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Gusto Brings in $140 Million, Doubling Valuation to $2 Billion

Payroll, benefits, and HR platform Gusto broadcast some news today with, well… gusto. The San Francisco-based company closed $140 million in Series C funding.

This brings Gusto’s total amount raised to $310 million and boosts its valuation to almost $2 billion. Joining existing investors in the round are MSD Capital (Michael Dell), portfolios managed by T. Rowe Price Associates, Dragoneer Investment Group, and Y Combinator Continuity Fund.

Josh Reeves, Gusto CEO and co-founder, said that the new investors share the company’s passion for “creating a world where work empowers a better life.” He added, “We chose these investors because they care about enabling small businesses with modern payroll, benefits and HR. There are millions of companies out there to help, and this is a long-term journey for us. We’re just getting started.”

Gusto will use the investment to enhance its payroll, benefits, and HR technology to add more direct-to-employee benefits that allow employees to manage how and when they get paid. The company recently unveiled a development along these lines with the launch of Flexible Pay, a solution that allows workers to choose a payday that works best for their cashflow situation, outside of their employer’s standard payroll schedule.

Henry Ellenbogen, T. Rowe Price New Horizons Fund portfolio manager, noted that Gusto’s expertise isn’t just limited to payroll. “We believe Gusto has an opportunity beyond the payroll category in which they have demonstrated leadership for the last six years,” He said. “The company has a strong and focused management team, and it has the potential to become much larger as it expands its efforts to employees who seek to improve their financial mobility and achieve greater personal prosperity.”

Gusto, which launched in 2012 under the name ZenPayroll and showcased its flagship payroll solution at FinovateSpring 2014, has been busy lately. Not only has the company expanded its client base to serve more than one percent of all employers in the U.S., the company also paired up with Xero earlier this month and in June launched a directory of accounting firms suitable for small and medium-sized businesses.

Finovate Alumni News

On Finovate.com

  • Microsoft, Nationwide Invest $12 Million in SME Lender BlueVine.
  • Gusto Brings in $140 Million, Doubling Valuation to $2 Billion.
  • Tavant Technologies Powers New Personalized Mortgage POS System from Ditech.

Around the web

  • Coinbase taps Jeff Horowitz as its next Chief Compliance Officer.
  • Thomson Reuters announces strategic partnership with global cryptocurrency market data aggregator, CryptoCompare.
  • FIS and blockchain platform Billon sign letter of intent to pursue joint product development.
  • Prosper surpasses 1 million loans have been originated, totaling about $13 billion.
  • Kofax enters sales agreement with JIEC to deliver RPA and digital transformation solutions.
  • CurrencyFair surpasses milestone: €7 billion traded.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Gusto and Xero Announce Strategic Alliance

A newly announced strategic alliance between payroll, benefits, and HR technology specialist Gusto and cloud accounting innovator Xero will bolster growth for Gusto, enable Xero to provide full-service payroll in all 50 U.S. states, and put competitors like Intuit and ADP on notice that a rival has arrived.

“We first began our partnership with Xero five years ago and, since then, they have quickly become one of the most popular integrations with Gusto,” Lexi Reese, Chief Operations Officer for Gusto, said. “We are confident that together we can help business owners manage the back-office complexities that can distract them from growing their companies.”

The strategic alliance will involve a deeper technical integration of the two platforms that is expected to be completed by early 2019. The new seamless experience for SME owners and accountants will provide a single sign-on enabling access to Gusto accounts using Xero credentials, automatically updated cash flow management, and the ability to provide permissions to trusted third parties such as outside accountants.

Other benefits include access to Xero’s business task automation, and a shared ledger that provides a real-time view into business data and cash flow.

“We’re partnering with Gusto because we have a shared vision for building innovative new solutions that help small businesses and accountants thrive in the new economy,” President of Xero Americas Keri Gohman said. “We’re both born-in-the-cloud companies working to build software that makes complicated business tasks more simple and human. By joining forces, we can help more small businesses and accountants find long-term success.”

San Francisco, California-based Gusto has raised $170 million in funding. and its investors include Kleiner Perkins, General Catalyst, GV, Emergence Capital Partners, CapitalG, and Ribbit Capital. The company, which demonstrated its technology at FinovateSpring 2014 as ZenPayroll, rebranded as Gusto in the fall of 2015. The rebrand included an expansion of the company’s services to include both health benefits and workers compensation management.

Last month, Gusto launched Flexible Pay, which enables workers to get paid on a day other than their regularly scheduled payday. Also in June, Gusto introduced its Partner Directory. Dubbed “Yelp for Accountants,” the directory is designed to help SMEs find the right accounting talent for their business. In addition to launching a freemium option this spring, the company began the year forging a partnership with accounting software provider Aplos.

Xero announced an integration with BBVA’s API Market for small businesses earlier this month. In June, the company introduced its Connected Accounting technology that automatically categorizes accounting data to give businesses insights that can help them better manage their finances. Back in February , Xero inked a partnership with IT management solutions provider Kaseya and announced ACH integration with Stripe

Headquartered in Wellington, New Zealand, Xero demonstrated the Business Identification feature of its online accounting system at FinovateSpring 2011. Founded in 2006, the company is publicly traded on the Australian Stock Exchange under the ticker XRO, and has a market capitalization of $3.7 billion (AUD$5 billion).

Gusto Launches Flexible Pay, Turning Payday into Any Day

Payroll, benefits, and HR technology innovator Gusto has unveiled a new solution called Flexible Pay that will enable workers in the U.S. to get paid outside of their employer’s standard payroll schedule. “The two-week pay schedule should no longer exist in today’s world.” Gusto co-founder and CEO Joshua Reeves said. “It’s a relic of calculating payroll taxes manually and was instituted in the U.S. almost 90 years ago. With modern technology, employees shouldn’t have to wait weeks to get paid.”

Eligible employers partnered with Gusto can begin offering Flexible Pay through the Gusto platform. The platform calculates, makes payments, and files all relevant taxes automatically, enabling eligible employers to use the solution without having to change either their current payroll schedules or debit frequency. Gusto noted in their announcement that solutions like Flexible Pay can help workers manage unexpected expenses without resorting to debt or payday lenders. Workers can set up direct deposit of earned wages via their Gusto account, and select their payday preference – even if it’s the next day. Currently available in Texas, Flexible Pay is expected to be available in other states over the course of 2018.

“Flexible Pay lets employees decide when they want to get paid for the work they’ve already done without additional cost to employers,” Reeves explained. “It’s the way we believe everyone will get paid in the future.”

Demonstrating its platform as ZenPayroll at FinovateSpring 2014, the company rebranded as Gusto in the fall of 2015, and announced the integration of health benefit and workers’ compensation management into its payroll offering. This provided businesses with a single unified service for both workers and employers. Gusto reports that 70% of its customers run payroll in five minutes or less, with 93% of them favorably comparing Gusto to traditional payroll service providers. The technology integrates with popular accounting platforms like Quickbooks, Xero, and TSheets, and the service is tiered to enable businesses of varying sizes to select the most cost- and feature-appropriate offering. This includes a freemium offering, HR Basics, launched this spring which gives small businesses a set of human resource tools for free, enabling them to manage worker vacation time and onboard new employees quicker.

Just a few weeks ago, Gusto introduced its own “Yelp for Accountants” partner directory to help SMEs find and hire accounting talent that specializes in the needs of small businesses. Named to the Forbes Fintech 50 for a second time earlier this year, Gusto began 2018 announcing a new partnership with accounting platform, Aplos.

Founded in 2011, Gusto serves more than 60,000 businesses in the U.S. and more than one percent of all U.S. employers. The company has raised more than $176 million in funding and includes CapitalG; General Catalyst; Kleiner Perkins, Caufield & Byers; Emergence Capital Partners; and GV among its investors.

Finovate Alumni News

On Finovate.com

  • TransferWise Helps Monzo Clients Send Money Abroad.
  • Hydrogen Takes Top Honors at Fintech Awards Luxembourg 2018.
  • Gusto Launches Flexible Pay, Turning Payday into Any Day.

Around the web

  • The Paypers interviews Comarch product development manager Bartłomiej Wójtowicz.
  • ACI Worldwide VP of Merchant Payments for Europe Andy McDonald discusses the future of real-time payments.
  • PYMNTS.com takes a look at PayPal’s acquisition of Hyperwallet.
  • Quadient announces availability of Quadient Inspire R12.
  • Passport powers mobile parking app for University of Illinois.
  • Finastra to sell its Collateral Management Corporation (CMS) business to Teranet.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • KeyBank Acquires Small Business Lending Platform Bolstr.

Around the web

  • Threat detection specialist Zighra announces support for FIDO authentication.
  • BBVA and energy company Repsol collaborate to develop blockchain-based financial products.
  • Etsy partners with Klarna, bringing new payment options to its German website and app.
  • IdentityMind Global inks licensing agreement with KYC2020.
  • Insuritas to launch member-owned insurance agency for Financial Resources FCU.
  • Streamdata.io unveils its API Gallery featuring more than 360 different entities with 14,400+ API paths spanning 420 topics.
  • Interactions wins Customer Contact Week ‘Omnichannel Provider of the Year’ award.
  • Dashlane reaches 10 million users around the globe.
  • WorkFusion wins Awards for Best Application of AI in Financial Services.
  • Lendio’s employee contribution program has funded 2,800 loans in 78 countries through Kiva.
  • Gusto’s Flexible Pay lets employees choose their own payday.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Gusto Launching its Own Yelp for Accountants

Online payroll and HR services provider Gusto is unveiling its Partner Directory today, a directory of accounting firms suitable for small and medium-sized businesses.

The directory offers Yelp-like reviews of accountants and is available to any business– both Gusto customers and non-customers– for free. The tool allows businesses to filter the search results by geography, services offered, software expertise, and industries served.

“We noticed a growing trend of accountants that are competing effectively against larger accounting firms by advising small businesses more holistically. These accountants are differentiating and ‘future proofing’ their practices by offering non-traditional services like benefits and human resources for their clients,” said Gusto Senior Product Manager Mike Lyngaas. “Recommendations for accountants and trusted partners are one of the top requests we get from small businesses, and the Partner Directory allows modern accountants and entrepreneurs to grow their businesses together.”

To curate the directory, Gusto screened more than 4,000 of its accounting firm partners for their payroll expertise, benefits and HR services, ability to help businesses claim the federal R&D tax credit, or even acting as an outsourced CFO. The company adds more accountants regularly to both its list of partners as well as to the directory.

Accountants can leverage Gusto’s technology to run payroll or provide benefits and HR services for all of their business clients. They can also tap into Gusto’s relationships with third party software providers.

Founded in 2011 as ZenPayroll, Gusto serves over 60,000 companies across the U.S. and has offices in San Francisco and Denver. At FinovateSpring 2014, Gusto CEO Joshua Reeves showcased the company’s payroll solution. In March, the company launched a freemium model for its payroll solution and in February was highlighted in Forbes for its diversity efforts. Of the company’s 525 employees, 51% are women.

Gusto Goes Freemium

Online payroll and HR services provider Gusto (formerly ZenPayroll) launched a freemium model. New this week, HR Basics offers small businesses a set of basic human resource tools for free.

The free service allows small businesses to manage employee vacation time, archive a directory of employees, and decrease the time it takes to onboard new hires. Unlike most freemium models, Gusto does not require small businesses to provide credit card or bank account information to use the service.

Gusto helps businesses move all paperwork online to create a better employee experience and company culture. TechCrunch, which covered the announcement earlier today, spoke with Gusto CEO Joshua Reeves, who commented on the term human resources. Reeves said, “Even the terminology ‘human capital management’ — humans are not capital, humans are not resources, they are people, thank you very much.”

As with all freemium offerings, the goal of Gusto’s HR Basics is to hook small businesses while they’re still small, so that when they need a more robust product, they’ll become paying customers. The company’s flagship product offerings range from $39 per month plus $6 per month per person and $149 per month plus $12 per month per person.

This move will help Gusto differentiate itself from its closest competitor, Zenefits, which also offers online HR, payroll, and benefits management. While Zenefits does not offer a free option, it does have less expensive and more a la carte pricing options.

At FinovateSpring 2014, Reeves showcased the company’s payroll solution. The company rebranded as Gusto in 2015, simultaneously pulling in $50 million in funding. Last month, Gusto was highlighted in Forbes for its diversity efforts. Of the company’s 525 employees, 51% are women. Gusto was founded in 2011 and is headquartered in California.