I’ve always said that breaking down walls built up by society’s elite is so important to me… and these days, it’s for good reason.
At the beginning of the year, you would have been hard-pressed to find anyone who could have predicted where we’d be right now. But just five months in, we’re in the midst of a global crisis unlike anything we’ve ever seen before, and it’s affecting our lives in more ways than one.
Not only are we dealing with a once-in-a-generation public health crisis… we’re also experiencing an economic downturn on a scale unseen in over a decade.
Our global markets are extremely shaky, and over 10 years of job growth has been eliminated in just a few short months.
In April alone, the private sector lost more than 20 million jobs. To put that into perspective, that’s about 27 times more jobs lost than in the worst month of our last recession.
It’s unsettling, and quite frankly, pretty scary.
It’s also reminiscent of a time not long ago that still stands out in recent-enough memory, when a chaotic credit crisis and massive big bank bailouts brought the economy to a screeching halt… seemingly overnight.
It was the Great Recession, when the economy lost millions of jobs, savings accounts drained, houses foreclosed, and people lost their trust in exist financial institutions.
It’s been over a decade, and people have not forgotten… and I don’t blame them.
Skepticism in banks – and elite financial institutions of all kinds – lingers on, especially for many in the younger millennial generation whose oldest members were just entering their first phases of adulthood when the world crashed down in 2008.
And I don’t expect this distrust to fade anytime soon.
But why should it? Every year, while big banks try to gain back the trust of the general public, newer, more innovative and more secure financial technologies step up to the plate.
I’m talking about fintech – an industry valued at around $127 billion just two years ago that’s expected to hit over $309 billion by 2022. That’s a massive annual growth rate of 24.8%.
And driving this booming industry are the very companies that are disrupting traditional banking mechanisms… digital payments.
Think apps like Venmo and Cash App – I’ve spoken before about how these guys in particular are shaking up the fintech playing field.
In fact, one of the most popular digital payment services, Square, was born out of the Great Recession in 2009. Now, Square is a leading financial service – not to mention a multi-billion-dollar unicorn.
But it’s not just mobile wallet services… we’re also seeing fintech companies tackle one of 2008’s greatest pain points: mortgages and other loan payments.
In the years since the Great Recession, tighter regulations on high-risk lending practices have led to a severe uptick in the amount of paperwork traditional banks need to make a loan.
Non-bank financial companies – think companies like Quicken Loans – have taken full advantage. These companies aren’t as strictly regulated as traditional banks, and many have worked to automate their lending processes in a way that’s faster and more-streamlined for users.
It’s a win-win for consumers… and fintech companies know that.
I fully expect fintech’s momentum to keep thriving well into the future.
With that said, I think that now is the most critical time to capitalize on this space… because by the time the economy recovers, today’s early-stage startups could be tomorrow’s biggest success stories.
Until next time,