Name: Aaron Schumm
Title: Founder & CEO
Web Address: www.vestwell.com
Aaron Schumm, who has spent almost two decades in the fintech and wealth space, is CEO of Vestwell, a digital recordkeeping platform for 401(k) and 403(b) plans.
How did you personally become involved in fintech?
There’s a long and short version of this story, so I’ll leave you with the cliff notes. But essentially, I knew at a very young age that I was going to go into finance. My dad is a retired carpenter, but he always had an affinity for the markets, so we started talking shop early. That set my course in undergrad to go into finance.
Northern Trust was my first job out of undergrad, doing large corporate ERISA pension plan analysis with asset managers, so it’s kind of interesting how it has all come back full circle. Then I went on to CheckFree (prior to the Fiserv acquisition & Tegra118 spinoff) because I wanted to understand how it all worked – including the software. CheckFree is where I cut my teeth into the financial technology space, as a product manager. On my last day there, my boss, Joe Mrak, and I started drawing up new ideas on a napkin. Without thinking much about it, I finished up my MBA and packed up my backs for a new job overseas, when I got a call from him saying he’s found the backing to pull that napkin out of the trash. One entrepreneurial endeavor led to another, and here I am trying to tackle the world of retirement.
What does your firm do/offer within the fintech sector?
Vestwell has reset the bar for retirement plan providers. Applying a new front end to a legacy backend does not improve its performance and efficiency. So we’ve entirely rebuilt the core infrastructure and architecture to power a $30T industry in a way that’s more modern, configurable, and efficient…for the benefit of everyone.
This starts with recordkeeping technology, which is 30+ years old at its core. Old technology means inefficient process, productivity, and cost which continue to plague the industry. We’ve completely rearchitected recordkeeping by creating an engine that allows us to turn over the keys to anyone, so they can more efficiently and effectively run their retirement business off Vestwell.
Vestwell’s front-to-back, API-driven workplace investing architecture keeps all administrative services running on a modern tech-stack in a seamless, integrated way. As a result, everyone can provide quality plans to their clients and employees without any barriers. Providers can make any size plan immediately profitable, companies can afford to have a 401(k) in place for their employees, and the experience for everyone is what we have come to expect from modern financial institutions.
What area/s of fintech do you believe will grow the most in the coming 5 years?
Many in financial services find themselves embroiled in a space race to own the participant journey. In payments, there’s an appetite for managing everything from purchases and cash flow to assets and liabilities. In retirement, it’s benefits and wellness to managed accounts and lifetime income. Yet legacy technology inhibits integration, scale, and data.
We’ll continue to see both acquisitions and partnerships that allow for connectivity and access across the thousands of providers in the industry. We already saw this with Visa’s acquisition of Plaid followed by Mastercard’s acquisition of Finicity. Neither made purchases for the perceived revenue. The central offerings of both Plaid and Finicity are all about connecting different applications in ways that make the flow of everything from data to money a seamless experience.
In retirement, people are looking across the entire lifecycle of a participant, understanding the important role student loans, HSAs, and emergency savings have within the defined contribution space. In a world where consumers are taking a more holistic view of their financial wellness, companies will continue to look inside and think strategically about how to best support the end-user. The growth of fintech will help each person leverage their next best dollar in the most appropriate place before the need to think about where to invest/borrow, and without having to be a financial wizard.