Your weekly resource for noteworthy news, fascinating features, and fintech titbits that caught our eye. Whether you live by your Twitter lists, save your Google Alerts, or simply scroll through LinkedIn for insights and commentary – there is a wealth of content that weaves a global story around fintech.
Our job at Fintech Talents is to work within that global story – finding the news items, conventional wisdoms and hard data that aids us in bringing the industry the best content, community and experiences in the business.
This week’s FTT Bookmark of timely resources and real time conversations is brought to you by Lisa Moyle, Director of Strategy at VC Innovations
Faster Payments American Style
I have become so used to transferring money from my bank account directly to others in near real-time that I barely remember the ‘before times’. With the launch of faster payments in the UK in 2008, my payment behaviour changed rapidly. Requests for lunch money are satisfied in minutes, ballet fees paid, the dry-cleaner paid prior to delivery (when I still had use for that type of clothing) – it really was a quiet game changer.
It is somehow puzzling to think that payments (along with postal delivery), outside of the largest providers in the US, takes so much longer than we would tolerate in the UK. Access to faster payments will broaden (ultimately to the over 10,000 depository institutions or their agents in the U.S). with the introduction of The Federal Reserve’s FedNow program. Due to be completed in 2023, a group of Regional banks and Credit Unions from Northern California will begin testing the program.
This will allow smaller banks and credit unions to compete with the larger banks and fintechs and offer their customers (consumers and small businesses) far better payment services. The introduction of the open-loop system will no doubt catalyse further innovation across the payments space.
Digital Banking Trends
I’ve seen a few people share Allison Beer, chief product officer and head of customer experience and digital for Chase views on banking trends to look out for this year. Noting that over half of Chase’s new digital users are over 50 and a recent survey indicating that 80% of respondents preferred to manage their finances digitally, the accelerated behavioural changes that we have seen over the past year are here to stay.
This will, she notes, strengthen the trends for greater personalisation, automation, and real-time payments (see above). Pulling on all of these trends, the lesson for financial services providers is that how you serve customers digitally will impact on who customers choose as their provider. The speed with which providers can respond to fast changing customer needs (exemplified during the crisis of the past year) requires agility, which is underpinned by technology. My hope is that that agility will be used to understand all customers (including those new to digital over 50’s).
I have been following this story with interest as it’s both an interesting tale and shines a light on how political manoeuvring may well have landed government with a fintech solution to a problem that could have been easily rectified though other means. With strong political support from former Prime Minster David Cameron and business cards with a government email address, it was not so long ago that Greensill capital and founder, Lex Greensill was lauded as a fintech success story.
Now with outstanding debts of an estimated $1.2 billion to creditors across the globe, the repercussions will be widespread – Credit Suisse, SoftBank, GFG’s Liberty Steel subsidiary, a US coal mining company, David Cameron’s reputation…
The questions around undue political influence and the lack of effective scrutiny will raise more questions than are answered in the coming weeks not least of which is that is fintech being effectively regulated?
This is a fantastic recap of some of the design shortcomings of the Paycheck Protection Program for small businesses, launched last year in the wake of the pandemic. The fact that it became the ‘largest small-business support program in American history, sending $734 billion in forgivable loans to struggling companies’ and failed to reach so many black and minority owned businesses will have repercussions for many years to come.
The full article is well worth a read as to how the rules and incentives put in place created a system that worked against those vulnerable businesses and, in practice, failed to reach many of them.
This very topic was also part of a few discussions at the recent Fintech Talents North America event (the content of which is now available on demand) and we heard first-hand from a range of institutions, including Carver Federal Savings bank, that worked full steam to overcome some of those shortcomings in the second round. As always, well thought out design, underpinned by knowledge of the communities served, highlights the importance of effective and fair policy or technology innovations.
As noted by Secretary of the Treasury, Janet Yellen, ‘Economic crises like the one now gripping the country “hit people of colour harder and longer” and intensify economic inequality… I am worried the current crisis will do this again. In fact, I know it will, unless we act.’
Rethinking company benefits
Should employers support women who choose to freeze their eggs with a view towards a future family? It is an expensive process but is gaining traction in many US tech companies. As has been highlighted in research, having children is often the worst career decision that women make while men often benefit from parenthood in terms of career progression. A trend towards making the decision to have children later runs up against the unforgiving nature of biology. There are a number of ways to support women (and men) in making decisions about when (if they so choose) to have a family and should be placed in the broader context of better recognition of women’s health issues – from fertility to menopause. These are not niche issues and affect roughly half of the workforce.
And on that note, in a ‘here we go again’ moment, from The Invisible Women newsletter, is the story of a new whole human heart replacement that has been developed. It is an exciting development and is already approved for use in the EU and on the road to approval in the US. There is one slight drawback, however, “While it’s suitable for most men, the current design is too big for most women.” Heart disease, for the record, is a leading cause of death for women in many parts of the world. Scream.
Next week it is over to my colleague Laura Camplisson for her take on a week of news.