Educating the masses
Times are changing in the banking industry. Old financial institutions are making room for fintechs whose main objectives come back to one, refreshingly moral USP: to educate the masses in money and how to invest.
The age for financial literacy is getting younger and younger. Last month start-up Greenlight raised $54 million to release a new debit card for kids, with heavy-hitting investors JP Morgan Chase and Wells Fargo, it’s unlikely the Atlanta-based fintech will fail in its mission to create child-parent bank accounts.
To me, this is fantastic. When I first set up a bank account it was a laborious process. It was all done through a branch, much to my brother’s dismay at the time, who couldn’t sit still for more than a few minutes. Making finance seem more interactive and flexible to Generation Alpha, those children born after 2010 and the invention of the smartphone, is a fantastic way to start that journey of trust. Let’s face it, with the likes of Revolut and Monzo, nobody’s staying loyal to their ‘family bank’ anymore.
As well as targeting the under nines, fintechs are also massively investing in small business owners and the gig economy. Indian neobank Yelo, which raised its seed round last month, is solely focusing on the likes of food-delivery workers and taxi drivers to improve day-to-day cash flow and remittance offerings. For these people, cash flow should be table stakes.
And it’s not just banking. Fintechs are changing the game for stocks too. Australian share trading start-up Stake, which recently secured a licence in the UK, is bringing the US market to the rest of the world. The web offering is visually unintimidating and takes little prior knowledge to navigate, giving young professionals an opportunity to break into the investment world without feeling like imposters.
If anything, there’s too much choice out there now which can be just as overwhelming as the old, impenetrable façade of the financial world before the 2008 crash. So how do we choose what and who will guide us through this changing industry? I’d say it’s a case of choosing niche leaders who stick to one thing and do it well. We’re kidding ourselves if we think some killer app is on the horizon that does everything from payments to investments to banking smoothly, all in one.
We, as consumers, need to make a conscious effort to do our research on what’s out there. If we let laziness prevail, then we’re just settling for a more diluted version of what we want and not showing a demand to companies for more. Just as banks and credit unions everywhere need take the initiative to embrace APIs with open arms, to educate customers on what’s out there. If we work together, we all win.
With education also come diversity. I was delighted to hear about the much-welcomed appointment of Alison Rose as RBS chief, the first female leader of a major UK bank. Her experiences as a woman will trickle down through the bank’s products and services, as well as its internal structures, to bring about a re-teaching of values which resonates with a sex often marginalised by the world of finance.
Children, gig economy workers, small business owners and women are all starting to form a new, far more inclusive financial infrastructure, which is being accelerated by fintechs determined to serve the underserved. And there’s no sign of this industry slowing down.
This article is also featured in the summer October 2019 issue of the Banking Technology magazine.
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