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Affirm’s founder, Max Levchin (Image —Time)

Affirm, a fintech unicorn known as a top Buy Now Pay Later consumer lender, has gone public, 3 months after filing its application with the SEC. The likelihood of this move first came after a report in July (from WSJ) broke the news that the company was speaking with Goldman Sachs about an IPO. With over 8 years since the company started and more than $1B in funding, the timing was right in making a move.


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Chase Mobile App (Image Credit — Bankrate)

In the aftermath of the Financial Crisis (2008–2009), large banks were taking a step back from their existing business models across all lines of business. The focused was on minimizing non-essential costs. JPMorgan Chase (JPMC) took the opposite approach and concentrated on expansion in the last decade. This growth not only included its retail footprint, which increased at a time when others closed branches, but also within international operations and adoption of new tech.

The top 3 banks were mired in controversy and headlines in 2009, over events that led to the recession — Chase essentially had a clean slate. Bank of America had ongoing investigations into Countrywide and Merrill Lynch acquisitions, while Wells Fargo (still) has rampant issues with fraudulent employee conduct and corporate culture. JPMC maximized its time and resources on strategic initiatives and partnerships for all stakeholders — and started to separate itself from the pack of traditional institutions and big banks. …


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Mobile Banking at a cafe (Image Credit — BiometricUpdate)

At the end of 2019, we reflected back on the 2010s and the early digital transformation that took place in financial services. The new wave of FinTech innovation launched new products, neobanks, and upgraded models for financial institutions to follow in the last decade. Many banks were slow to make progressive changes to their digital offerings and customer experience outside of the bank branch, which we recently discussed (in the “The Road Ends for the Bank Branch”). The post-COVID era of banking will require banks of all sizes to fully commit to changes in technology and processes in the 2020s. …


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US Regulator Approvals (Image Credit — PaymentsJournal)

With the focus of 2020 being on COVID-19 and most recently the US presidential election, it’s difficult to see through the headlines the critical developments in regulation of FinTech companies. There are numerous milestones in application approvals led by Varo Bank receiving its bank charter approval in July. Throughout the year other companies (from payments, cryptocurrency, and broad financial services) have had gains in regulatory approvals towards licenses that allow for operations independent of bank partners. These established fintechs would be able to create new business models, become more cost-effective, and launch new services at a faster rate.

Here are 3 FinTech firms that have made headlines this year with regulatory approvals. …


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TED Talk (Image Credit — Forbes)

About a year ago, we posted “The 6 Best TED Talks about Financial Services.” The subject matter experts covered topics from digital transformation, blockchain, microfinance, and cryptocurrency — all within financial services. The short-form, storytelling format continues to be influential in helping audiences globally absorb industry content.

This year we look to narrow the focus down to FinTech and banking, featuring speakers (from the last 5 years) — discussing insights on digital banking and its future, FinTech’s impact for improving the world around us, and the intersection with artificial intelligence and cryptocurrency.

It’s great to reflect on talks from 2014–2016, especially in how the maturing FinTech ecosystem we know today was still seeking acceptance. So switch your binge watching from Netflix to TED talks — just for a few minutes — and gain some perspective of how far FinTech has come in the last 15 years. …


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Customer Support team (Image Credit — NextGov)

FINTECH FLASHBACK is a series on FinTechtris that takes a look back at topics first discussed over a year ago and provides updates, dialogue, and further developments of what’s going today in the industry.

Over a year ago, we discussed Customer Experience (CX) as being the most impactful factor for financial services companies. With CX, all interactions between an organization and client (throughout an entire customer lifecycle) are considered. Customer experience in FinTech (not to be confused with customer support) includes traditional elements (of price, product, scale), convenience with interactions across multiple channels (i.e. …


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Prize in Prize-linked Savings (Image Credit — Forbes)

As a response to the economic downturn from the pandemic, governments around the world have lowered bank rates to 0% in order to reduce the impact. This policy move has had a ripple effects on deposit interest rates that retail banks pass to clients with savings, money market accounts, or certificates of deposits. Funds left in the bank effectively earn no interest and provide no benefit beyond FDIC insurance and access.

Despite this, consumers and businesses still have a need to set aside funds for emergency savings and to cover drops in income. Within financial services, prize-linked savings (PLS) programs are starting to increase in popularity and usage. …


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Business Exec Walking a Tightrope (Image Credit — ERP)

The headlines for the FinTech industry are filled with high-profile acquisitions, companies going public, and a bank charter approval — all within the last 7 months. It would seem the investment community can’t get enough of innovative financial services firms and their platforms.

For founders of early stage fintechs and growing startups in 2020, this hasn’t been the case. Due to COVID-19, seed funding for new ventures and projects has dramatically dropped in the first half of the year (see chart below). …


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Mobile screens for Vibe, Klarna’s new loyalty program (Image Credit — Efma)

The financial impact from COVID-19 resembles what happened after the Financial Crisis of 2008–2009. Concerned about fees, interest rates, and high levels of debt from loans and credit cards, consumers looked for alternative payment methods in debit cards. For millennials and younger generations, credit is not an option that they qualify for due to low or poor credit profiles. For these spending conscious and debt averse consumers, Buy Now Pay Later point-of-sale (POS) microloan offers have become a popular alternative for payment, by spreading out online and mobile purchase amounts into interest-free installments over time. …


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Varo’s debit card (Image Credit — WealthManagement)

July 31, 2020 is now a historic date for the FinTech industry as Varo (a 6-year old neobank in the US) was approved for a national bank charter by the OCC (Office of the Comptroller of the Currency) — officially becoming the first fintech to become a retail consumer bank.

In the early days of FinTech back in 2010, fintech companies were seen as disruptors in banking, who competed directly with financial institutions. …

About

William U. Morales

More than innovation in financial services — covering the next generation in FinTech and Banking. Content, strategic partnerships, and growth @FinTechtris

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