4 Things to Know about the Creator Economy (and How Banks Can Get in)

4 Things to Know about the Creator Economy (and How Banks Can Get in)

The modern world has witnessed three major economies. First, there was the industrial economy in which people earned money through physical activity. Then came the consumer economy in which people made money performing services. Next, the knowledge economy enabled people to earn money through leveraging intellectual capital and insight. 

In these past few years, we’ve been witnessing the birth of the creator economy, a new economy fueled by social media platforms and video sharing. This new working order democratizes the ability for anyone to become a celebrity. Here’s a look at four key facts of this new economy.


While many consider the creator economy to be limited to YouTubers and Instagram influencers, it actually has a wider breadth. In essence, everyone with an online presence is a creator, since we are all making content and sharing it online in some form.

A more exclusive definition of a creator is anyone who monetizes content online. This represents not just social media influencers, but also includes those who create and sell NFTs, ebooks, podcasts, digital art, etc.

Because there are such low barriers to entry in the creator economy, even kids can do it. In fact, one of the most famous YouTube creators is Ryan, an 11-year-old with 30.9 million subscribers who posts videos of himself playing with toys. Ryan is reportedly worth $32 million.

The participation of kids in the creator economy is influencing how younger generations view their future. According to a recent study, one third of kids between ages eight and 12 want to be either a YouTubber or Vlogger when they grow up.


The current size of the creator economy is over $100 billion and growing. YouTube alone expects a $30 billion stream of revenue by the end of 2021. Of the 50 million people that consider themselves a creator, around two million of these are professionals making six-figure salaries.

Where’s the money?

Just like other economies, one of the ways that creators are recognized for their contributions is by getting paid. While this payment used to come from ads, branded content, or sponsorships, today’s monetization looks different. That’s because, instead of relying on third party sponsorships and brands to receive payments, creators now receive payments via subscriptions, tips, and even by payments directly from the user.

One of the latest examples of this is TikTok, which recently introduced the concept of in-app tipping. Users with more than 100,000 followers can apply to begin receiving tips from their fan base. When they receive a tip, 100% of the compensation goes to the creator; TikTok doesn’t take a commission.

Creators aren’t just getting paid in dollars. Owners and creators of non-fungible tokens (NFTs) receive payment in cryptocurrencies in exchange for their work. For more on how NFT compensation works, check out our piece 7 Things to Know about the NFT Craze.

How to leverage the opportunity?

The most important part about the creator economy for banks and fintechs is knowing how to leverage the opportunity. The future of this economy is unlike any we’ve ever seen in that payment and monetization may not rely on traditional banking infrastructure. In fact, many participants’ future revenue will be decentralized.

What we know for sure, however, is that personalization and customer experience matter and will continue to reign, even when payments are thrown off the rails. Many digital banks are already capitalizing on this opportunity. Just take a look at Nerve, a bank for musicians; Karat Financial, a bank for digital creators; and Willa, an invoicing tool for creators.

These financial services firms are different from banks in that they understand the unique challenges that come with being a creator. For example, creators experience many of the same difficulties as the self-employed, such as difficulty qualifying for a loan. They also often times have lumpy cashflow and need help with budgeting and financial planning.

There is still time for traditional banks to come up to speed in the creator economy. The key to serving this unique customer base will be to expand your existing resources for self-employed customers by offering new services such as revenue-based financing and on-demand wage access. As with most things in today’s digital banking era, the only way to properly serve this new user base will be through partnerships.

Photo by Ben Eaton on Unsplash

Here’s Why AI is No Longer a Fintech Trend

Here’s Why AI is No Longer a Fintech Trend

Can we stop naming AI as a trend in fintech? Probably not yet, but we should. That’s because trends ebb and flow, but AI isn’t going anywhere. Banks and fintechs aren’t going to let up on leveraging AI within the decade. In fact, the number of times we’ve seen the adjective “AI-powered” has only increased.

Depending on how you define it, fintech has been in existence for around 20 years. That’s a long time for themes to rise and fall. Below is a look at transitory trends, lasting trends, and AI’s place in the mix.

Fleeting trends

As regulation, technology, and consumer habits and tastes have changed throughout the years, so have fintech trends. However, many ideas in fintech never took off. While some were overhyped, others were simply a solution looking for a problem or were an idea before their time, offered to the market too soon.

A recent example of a transitory trend is card-linked offers (CLO) Also called merchant-funded rewards, these customer loyalty and rewards tools reached their peak in 2012. Similar to the buy now, pay later craze that is happening right now, there were multiple launches of new CLO companies each month. Even large banks were getting on board. In fact, in 2012 Bank of America debuted a CLO product, BankAmeriDeals, powered by Cardlytics.

It’s worth noting that card-linked offers are still around. It is only the growth rate and hype around CLOs that have decreased. In fact, Cardlytics, Cartera Commerce, Cachet Financial Solutions, and others still exist and serve customers today.

Lasting trends

The list of lasting trends in fintech is short. In fact, there are only a handful of trends that have been introduced over the last two decades that have become table stakes for every bank and fintech across all sub-sectors. Not surprisingly, because these lasting trends are now standard throughout the industry, they all seem quite obvious.

Three solid examples of these stronghold trends include having a digital presence, providing a mobile app, and offering digital payment/money transfer capabilities. The evolution began, at the dawn of fintech, with banks just starting to establish their online presence. The next adaptation of that was SMS banking, which evolved into to mobile apps and digital money movement.

Today, the application of AI is becoming so standard across the fintech industry that it can be added to the fintech trend hall of fame.

The current state of AI

In case you haven’t been paying attention, AI is being used across the entire fintech industry. Its applications are almost limitless, but here are a handful of current examples.

  • Lending– Underwriters can use AI to enhance the decisioning process to reduce risk, as well as to monitor for unseen biases in the lending process.
  • Payments– AI can enable biometrics-activated payments and can also create smooth payment processes by analyzing past transactions before approving or declining transactions on an issuer’s behalf.
  • Wealth management– Wealthtech companies can empower users with self-driving money, a concept that describes moving funds into and out of different accounts and investments based on fund performance, cash flow, and bill due dates.
  • Insurtech– AI can enhance predictive data modeling to create better pricing models around policies.
  • Security– Fraud detection in financial activity relies heavily on AI, as do both identity detection and verification.

Funding for AI fintechs has been on the rise since 2016. According to CB Insights, the total amount of funding in 2021 for AI startups in fintech is at the same level as last year’s year-end total, with $3.1 billion raised across 161 deals. This year, the average investment size clocked in at $25 million. There has also been an increase in M&A activity for fintech AI startups. So far this year there have been 12 mergers and acquisitions in the space, compared to eight last year and two in 2016.

Photo by Volodymyr Hryshchenko on Unsplash

3 Reasons the U.S. Will Come in Last in the Race to a CBDC

3 Reasons the U.S. Will Come in Last in the Race to a CBDC

The concept of Central Bank Digital Currencies (CBDCs) is already familiar to most in the banking and fintech industry. However, the idea that the U.S. will have a functioning CBDC of its own in the near future still seems far-fetched.

PwC’s CBDC global index ranks the U.S. 18th in the globe when it comes to the maturity of its retail CBDC project. This places the U.S. significantly behind countries including the Ukraine, Uruguay, and Turkey, which all rank among the top 10.

So when the U.S. rarely ranks below the top 10 in any global comparison, what’s holding it back when it comes to CBDCs? There are three major reasons, as outlined below.


The U.S. is a big ship to turn, partially because the country’s legislative process is slow. This is true especially when compared to other countries, such as China, which have more authoritarian control over citizens.

This lack of agility can be seen in other federal initiatives, such as FedNow, the U.S. central bank’s instant payment service. Initially announced in 2019, the service will begin a phased launch of real time payments in 2023 and aims to be fully operational by 2024. As American Banker noted, FedNow should instead be called FedLate. By the time the central bank rolls out instant payments, many other private industry players will have already stepped in. In fact, some already have. Ripple, The Clearing House, and Orum are already offering real-time payment solutions.

And the U.S.’s progress is slow not only when it comes to implementing a CBDC, but even in simply making the decision to implement one. Earlier this fall, the Federal Reserve announced plans to “soon” release its research on a CBDC. While this is an important first step, the report won’t even take a stance on whether or not the U.S. should issue a CBDC.


This is a big one. The U.S. government is siloed; there is no central authority of who would have direct oversight or responsibility for the issuance or regulation of a CBDC.

Government branches that would want a say in the matter include not only the Federal Reserve, but also the Office of the Comptroller of the Currency, the Securities and Exchange Commission, the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Financial Stability Oversight Council, the Federal Financial Institutions Examination Council, the Office of Financial Research, and state and regional authorities.

This list doesn’t even include private commercial banks, which will be crucial to the rollout of a CBDC.

This large number of stakeholders is highlighted when contrasted with India, Kenya, and Brazil, which all have central digital payment systems that are overseen by their respective central banks.


Simply stated, many U.S. citizens don’t trust their government. This distrust is potentially the consequence of free speech mixed with 21st century communication technologies and sharing platforms such as Facebook and YouTube, which help spread misinformation and skepticism. If you’ve ever met someone who thinks that the Earth is flat, you know what I mean.

U.S. citizens’ reactions to a recently proposed measure, the IRS reporting mandate, illustrate that the distrust of the government isn’t just for conspiracy theorists. The IRS reporting mandate was part of President Biden’s Build Back Better bill, a bill that would have required financial institutions to report inflows and outflows totaling more than $600 from bank accounts to the IRS.

The purpose of the bill was to catch tax fraud; it would generate an estimated $463 billion in revenue over 10 years. However, many citizens on both sides of the political divide viewed the additional governmental surveillance as overreach. “While the intent of this proposal is to ensure all taxpayers meet their obligations—a goal we strongly share—the data that would be turned over to the IRS is overly broad and raises significant privacy concerns,” Democratic representatives wrote to Speaker Pelosi. “We have little information about how the IRS plans to protect or use this massive trove of data. Americans expect their bank or credit union to safeguard their financial information.”

If the U.S. government issued its own digital currency, many would switch to cash or alternative currencies. It is evident that U.S. citizens don’t want to offer data on financial habits to their government. Additionally, many would likely not appreciate that the government would be able to dictate how they spend a government-issued currency. Indeed, one of the most appealing aspects for governments of a CBDC is that they can control how and when certain funds, such as stimulus checks for example, are spent.

The last shall be first and the first last

Ultimately, the headline of this piece may be a bit dramatic. The U.S. may not necessarily be the last to establish its own CBDC. However, it is already lagging behind many developed countries and doesn’t appear to be making much progress.

“The reason you could say the U.S. is behind in the digital currency race is I don’t think the U.S. is aware there is a race,” Yaya Fanusie, an Adjunct Senior Fellow at the Center for a New American Security, and a former CIA analyst, said in an interview with TIME. “A lot of policymakers are looking at it and concerned…but even with that I just don’t think there’s this sense of urgency because the risk from China is not an immediate threat.”

And as TIME described, this disconnect may cause the U.S. to cede control of previously established global financial power. “With private companies pushing deeper into the digital currency space, rival countries seeking to seize leadership, and a public that is moving further away from physical currency,” the author wrote, “the U.S. is facing a world in which it may not control or even lead the world’s payment systems.”

Photo by Sides Imagery from Pexels

Why PayPal Actually Should Acquire Pinterest

Why PayPal Actually Should Acquire Pinterest

Last week the rumor mill was turning rapidly with news that PayPal was in talks to purchase visual bookmarking tool Pinterest. The purchase would have been a big one, as PayPal was said to have offered $45 billion for Pinterest.

PayPal has been quick to quash the gossip, however. The company issued a release on Sunday stating, “In response to market rumors regarding a potential acquisition of Pinterest by PayPal, PayPal stated that it is not pursuing an acquisition of Pinterest at this time.”

But there are a few arguments why acquiring Pinterest would actually be good for PayPal. Let’s take a look.

Bolster online shopping

Integrating Pinterest into its own app would give PayPal the potential to be an online shopping powerhouse. The curated nature of the images on Pinterest makes the social media company, in effect, a staged showroom for potential ecommerce purchases.

This is thanks to Pinterest’s Product Pins, a tool that essentially helps users purchase items they see in a pin without leaving the Pinterest app, and Shoppable Pins, affiliate links that content creators can add to pins to receive a commission from purchases.

PayPal is already known for offering payments, loyalty programs, money transfer capabilities, and a high-yield savings account. If the company integrated Pinterest within its own app, it could serve as a shopping inspiration app. Pinterest users already spend hours browsing to get ideas for everything from clothing to gifts to vacations. If PayPal could insert these habits into its own app, it could become the app where consumers go before they even think about the transaction.

Compete with Amazon

Buying Pinterest would help PayPal compete even with the likes of Amazon and eBay, PayPal’s own former parent company. While the transaction volume wouldn’t come near that of Amazon’s, PayPal would have a small leg up on the online retail giant.

That’s because Pinterest would bring an addictive, continuous scroll interface with a built-in client base. What’s more, users can plan and purchase almost anything from Pinterest– even travel tickets and experiences. For example, users planning their trip to the Maldives can purchase their hotel stay from within the Pinterest app. In contrast, when an Amazon customer searches “Maldives,” they are directed to purchase a book or a t-shirt.

Bolster its reputation as a superapp

The new release inches PayPal closer toward becoming the first super app in the U.S. Last month, the company launched a new version of its mobile app.

However, the app lacks some elements of more traditional super apps. Even though PayPal has a wide variety of financial tools and capabilities– including a high-yield savings account, loyalty and rewards tools, billpay management tools, a direct deposit feature, gift card management, credit access, buy now, pay later services, and crypto transactions– the app lacks breadth.

As we reported earlier this year, there are 10 key elements to a super app. And even if PayPal successfully integrated Pinterest, it would be missing most of the elements, including food delivery, transportation services, travel services, health services, insurance, and government services.

What’s holding PayPal back?

Why might PayPal be hesitant to acquire Pinterest? A lot of it likely has to do with the price tag. Pinterest has a current market capitalization of around $32.7 billion. The rumored $45 billion acquisition represents about 15% of PayPal’s own market capitalization of $290 billion.

An acquisition of this size wouldn’t be out of the ordinary in the fintech industry. However, the deal would be sizable enough that PayPal would need a very clear value proposition with the integration of Pinterest.

Seven Things to Know About the NFT Craze

Seven Things to Know About the NFT Craze

Non-fungible tokens, better known as NFTs, have been making their way into mainstream culture this year. From “breeding” digital kitties to collecting NBA trading cards, the possibilities of buying and selling digital media are endless.

If you’re NFT-curious, one of the best ways to discover more is to create or purchase your very own NFT. If you already have a crypto wallet, it is fairly simple. Create your own by uploading a photo to OpenSea or check out the OpenSea marketplace to browse media. It only took me around five minutes to create my first NFT:

As a quick-fire way to help you sort the ins and outs of NFT trading, here’s a quick list of seven things you need to know about the NFT craze.

1. NFTs are not just for fintech nerds

The fact that NFTs leverage the Ethereum blockchain doesn’t scare off creators nor buyers. Multiple marketplaces, including the aforementioned OpenSea, Binance, and Rarible make it very simple to upload, buy, and sell NFTs. As Time reports, teenagers as young as 15 are already making millions of dollars by creating, buying, and selling NFTs.

2. NFTs are good for creators

Instead of sacrificing commissions to art houses, publishing companies, and other middlemen, creators can keep the majority of the purchase price for their work. OpenSea, for example, charges only a 2.5% fee. Additionally, some NFTs enable the artist to receive a royalty payment each time the NFT is sold or changes hands.

3. NFTs benefit buyers

The value of buying and owning NFTs is a bit less clear than the value for creators. Aside from exercising bragging rights, NFT owners can use the NFT as a speculative tool by buying and selling NFTs, or they could use their purchase as a way to more directly follow and support artists.

4. Anyone can create an NFT

As long as a user has a crypto wallet and is able to upload media, they can create their own NFT. My NFT is proof of this– while I am certainly not an artist (I failed art in the fifth grade), I was able to upload a photo I already had to quickly create my own.

5. NFTs are one-of-a-kind

As the name suggests, NFTs are non-fungible, meaning they cannot be exchanged with assets of the same type. In other words, unlike currency which can generally be exchanged one-for-one (I can pay you a dollar for your dollar), each NFT is completely unique.

6. Yes, NFTs can be copied or downloaded

Because NFTs are digital media, they can easily be reproduced. Anyone can take a screenshot of an original NFT or download a copy of a video. The value, however, is in owning the original NFT. As an example, there are many copies of Van Gogh’s Starry Night, but none are as valuable as the original.

7. NFTs can potentially bridge the digital/ physical divide

While NFTs are restricted to digital assets, it is possible to use NFTs as a type of verification method for the purchase of an original, physical item. For example, Nike has patented a way for sneaker collectors to track ownership and verify the authenticity of sneakers.

Photo by Fakurian Design on Unsplash

Has the Pandemic Actually Benefited Women in Fintech?

Has the Pandemic Actually Benefited Women in Fintech?

The pandemic has not only shined a light on the inequalities of women in the workplace, it also created a larger gap, especially for working mothers. Between mandatory home schooling and a lack of childcare, the workload that women bear around the house is increasing.

There have been plenty of studies and articles stating that these demands are placed unfairly mothers, have made it difficult for them to advance in their career, and have caused many mothers to drop out of the workforce entirely.

I don’t want to minimize the headaches that moms (and truly everyone) have endured over the past 20 months. However, it’s worth pointing out a few ways that the pandemic economy has actually benefitted working mothers, specifically mothers working in fintech (myself included).

Flexible hours

The need for employees to balance work with home schooling and childcare motivated many workplaces to embrace more flexible working hours. As long as employees produce quality work, put in the necessary hours, and attend mandatory meetings, many are able to set their own schedule that works with their family.

Moms are always on call, whether to nurse a baby, help with homework, solve an argument, or change a diaper. So being able to step away from the computer to take care of pressing tasks is a huge benefit.

Remote working is the new norm

Prior to the pandemic, many workplaces were strictly against remote work, even when in-person collaboration wasn’t necessary. While commuting into an office five days a week has its benefits, it also comes with its share of difficulty. Not only does the extra time of the commute add up, but there is also more time and money spent on a professional wardrobe and makeup.

For breastfeeding mothers, long commutes are especially burdensome because the more time spent away from the baby means the more times mothers have to pump, store milk, and wash and sterilize bottles.

Meetings and conferences come to you

I included this point because of personal experience. My son was nine months old when I attended my first conference after maternity leave. Because I was still nursing, I chose to bring him with me to FinovateFall 2019 in New York. Even though I was physically at the conference, I still missed out on much of the content because I had to step out to nurse him so frequently.

In comparison, at FinovateFall 2021 last week, I was able to attend the show digitally from my home office with my newborn daughter on my lap. I was so much more present during the demos and discussions since I wasn’t running back and forth from the venue to a hotel room.

In this post-pandemic way of work, many businesses have made a point to offer digital experiences either in place of or alongside physical meetings. Now that so many more meetings and conferences offer a digital option, women do not have to miss out in the event they need to care for a sick family member or if they have a gap in childcare.

Normalizing home life

Perhaps the biggest upside of the pandemic is that it has shed a light on the full breadth of women’s duties outside of the workplace. Not only this, but colleagues are more accepting of times when family life collides with work. I’ve worked from home for 11 years, and prior to the pandemic I would have been mortified if my two-year old was audible outside of my office door on a conference call.

In this new era, colleagues and clients are much more open to home life. In fact, I’ve videoconferenced with people who not only don’t mind seeing and hearing children in the background of calls*, but they also ask me to bring them to the computer so that they can say hello to their children on the other end of the screen.

*At least within reason. Yes, children can be quite annoying sometimes.

Photo by Brian Wangenheim on Unsplash

3 Takeaways from Jill Castilla’s Keynote at FinovateFall

3 Takeaways from Jill Castilla’s Keynote at FinovateFall

At FinovateFall last week, Citizens Bank of Edmonds CEO Jill Castilla described how she is leading her bank through the pandemic. In her 16-minute address, she described how her bank navigated the decision making process and leveraged fintech relationships to help their small business customers survive COVID lockdown.

Citizens Bank of Edmonds was founded in 1901, has $400 million in assets, and 55 employees. The bank aims to serve everybody and has a goal to be the best at everything. And while that sounds like a lofty goal, the bank has proven that it is up to the task by implementing unique solutions that come alongside customers to meet their needs.

So what does it take to be such a successful bank in both the eyes of competitors and customers? Here are three takeaways from Castilla’s keynote that are worth considering.

Communication is foundational

By today’s standards, Castilla is very liberal about offering up her contact information. During the pandemic, she was quick to share her cell phone number; she even tweeted it out multiple times! Providing this open line of communication to both staff and customers was key to ensure that nobody fell through the cracks. Castilla even concluded her keynote by sharing her phone number, saying, “You’re welcome to text me any time.”

But it doesn’t end there. When the pandemic hit, Castilla made sure to contact all of Citizens Bank of Edmonds’ business customers to determine their main areas of stress. And when the bank had to close its lobby, it sent employees to meet customers at the curb to schedule time slots to serve its customers and maintain the personal touch.

Look forward

Castilla watched Frozen II during lockdown and the quote, “All one can do is the next right thing” caught on. In trying to make decisions for the bank, Castilla and her team would consider “the next right thing.” In other words, they would think about what the best decision would be for the future, and not for the present moment.

Castilla offered the example of using the mantra to determine if Citizens Bank of Edmonds should host its annual block party at a time when COVID was just getting started. Thinking about the next right thing made it easy for the bank to call off the party.

And while a block party may seem trivial, consider this mantra implemented for a larger, more strategic decision making. Questions such as, “should we make an investment in AI technology?” or, “should we partner with this up-and-coming fintech?” are a bit easier to answer when filtered through the lens of the next right thing.

Focus on the needs of clients

This takeaway ties back into the first two points, because if financial institutions maintain a foundation of communication while focusing on the next right thing, they will ultimately be doing what is best for their clients.

“Doing the right thing will help you find your people,” Castilla said during her keynote, “And talking about what’s important to you out on social media and the digital space will help you connect with people.” She also noted that both banks and fintechs are trying to do what is best during this challenging time, adding, “Collectively and individually, while working together and on our own, we’re going to change the world for [consumers and small businesses], we’re going to provide greater access to credit, we’re going to have a better understanding of what their financials are, (and) we’re going to help them run more successful businesses.”

Photo by Adi Goldstein on Unsplash

The 10 Elements of a Super App

The 10 Elements of a Super App

Even though super apps aren’t common in the U.S. or Europe, most everyone in fintech across the globe is familiar with them. Super apps serve as a one-stop shop that allow users to access multiple services from a single place.

In Asia, the hot spot for super apps, users are able to use super apps for everything from ordering groceries to hailing a cab to managing their finances. Apps including WeChat, AliPay, Paytm, and Grab are commonplace across Asia. In fact, WeChat has more than 1.2 billion monthly active users; 78% of people in China between the ages of 16 and 64 are using WeChat.

It is the “super” nature of these apps that makes them so successful; they are a platform and do not just fulfill a single purpose. With a combination of in-house technologies and third party integrations, the apps serve a range of consumer needs. Many super apps began with only a single purpose, accumulated a large number of users, and then began adding new capabilities.

What does it take to become a super app? Starting with a massive user base helps, and providing a range of tools for everyday tasks and activities will help keep those users coming back. Below are 10 common capabilities of successful super apps.


As the popularity of WeChat has proven, social tools are sticky. Building communication, collaboration, and sharing capabilities into an app not only builds a user base, but also creates a community around a brand.


Shopping is taking place increasingly online, which means that ecommerce purchases are becoming a large part of consumers’ everyday lives.

Food delivery

Everybody needs to eat. And between online grocery orders and takeout meal deliveries, super apps can help users meet this need.

Transportation services

Just as important as having food and online purchases delivered is having the means of getting from one location to another. Included in this category are ride hailing services, car sharing services, and bike or scooter sharing services.

Personal finance

Another one of life’s essentials is managing finances. From budgeting for daily expenses to planning for retirement, banking and finance tools are key components of a super app.

Travel services

Offering travel services, such as travel insurance, concierge services, and rental car discounts, is commonplace for many financial services companies. Super apps offer more robust capabilities, however, such as flight comparison and booking tools, train schedules and ticketing services, and hotel booking capabilities.


Paying bills is a regular occurrence for most people, so including utility billpay and a mobile top-up feature will give users yet another reason to log into a super app on a regular basis.

Health services

The healthcare industry is fragmented. So providing health services, such as appointment booking, tele-health calls, records management, general health information, and ask-a-nurse services in a single place provides a lot of value for end users.


Similar to the health industry, insurance comes with a lot of moving pieces. Offering a digital lock box with insurance cards, contact information, coverage options, and payment history is a valuable tool that can help keep users organized.

Government and public services

Rounding out the list of life’s necessities in the digital realm are government and public services. Super apps can host social security cards and information, public transportation payment options, and library card information.

Photo by Mehdi on Unsplash

Is Niche Banking Here to Stay?

Is Niche Banking Here to Stay?

For several years now, there has been a rise in the number of digital banks taking on traditional banks, vying for a share of their client base. In the past couple of years, however, we’ve seen a slight twist in this trend.

These digital banks are taking personalization to the next level, and many have launched with the purpose of fulfilling the unique needs of niche subsets of the population that each share similar needs and struggles. Notably, these digital newcomers are generally not a solution looking for a problem; they are truly meeting unmet needs of previously ignored client bases.

Built for “x”

There are endless examples of these digital banks built for “x.” However, here are a few that Nymbus Board of Directors Member Rilla Delorier highlighted in her keynote at FinovateSpring:

  • Sable, banking services for immigrant employees and international students who may lack a social security number
  • Hitched, an app that helps newlyweds manage their funds together
  • Convoy, payment and money management services to meet the needs of long-haul truckers
  • Blueprint, banking services for contractors
  • Gig Money, money management tools to help gig workers smooth cash flow
  • Access, a banking platform that provides capital to black-owned businesses

This concept of niche banking isn’t new. Many community banks and credit unions launched to serve unique populations such as teachers and military families, but have since expanded their membership to serve the needs of a broad population. The continuous call for personalized products and services in the banking sector, however, combined with the lack of action from traditional banks, has inspired a new rank of fintech nerds to develop and launch not just clique-specific services, but clique-specific banks.

Sticking power

These newcomers have struck a nerve with users, especially those who were previously underserved. That’s because they not only make banking products accessible, they do so in a language that each unique consumer group understands. For example, the website may provide multiple language options or leverage visual/video tools to better communicate with customers from different backgrounds.

Furthermore, digital banks are providing products and services tailored to the unique needs of these groups. If the customer base notoriously struggles with making ends meet, for example, the bank might offer an early pay option that fronts their paycheck a week-or-so in advance. Or, in an example of a gig worker-specific bank, the bank may provide a tool that helps smooth out the user’s cashflow to ensure they don’t overspend on a month when their income is higher than average.

This segmentation goes beyond what traditional banks, who serve users based on geography, have previously offered. “If you think about defining community based on geography, where you live doesn’t really determine what your financial needs are,” Delorier explained in her keynote.

Given this hyper-personalization, expect that this new form of digital banking is here to stay. That said, traditional banks still have a the opportunity to stay in the game.

How it will work alongside traditional banks

What should the role of traditional banks be amid all of this? In short, the answer is that banks will be expected to collaborate with new digital banks and standalone technology providers. As Alyson Clarke, Principal Analyst and Forrester Research said in her presentation at FinovateSpring, “In the era of open finance, no bank will succeed alone.”

Banks need to become comfortable with collaboration, partnerships, and coopetition. Clarke recommends that banks build multiple routes to market, partner where they are weak, and specialize in what they are good at. “What we do know is that most banks will have a stark choice: own customers or power finance. But in the future, few will do both,” Clarke concluded.

What will traditional banks’ response be?

Both Delorier and Clarke recommend banks do one thing: rethink. That is to say, banks should rethink their digital transformation, rethink policies and procedures around credit decisioning and membership criteria, and rethink customers and markets.

What this looks like will vary among organizations, but banks can start by conducting research to discover unmet customer needs, incorporating diversity into their workforces in order to represent a wider range of customer segments, and leveraging technology partners.

“It’s not about following your established business models and delivering digital technology with agility. That’s not good enough anymore,” said Clarke. “You have to rethink customers and markets, rethink your consumers and what they need and invest ahead of that change to be more responsive.”

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5 Ways Payments Will Change in 2021

5 Ways Payments Will Change in 2021

With vaccination programs in full swing in many nations across the globe, the spread of COVID is finally beginning to slow. What is not slowing, however, is the change that the pandemic has brought to consumers’ finances, including how they spend their money.

With that in mind, here are five aspects of payments that will change in 2021, as consumers solidify the habits they picked up last year.

QR codes

As we’ve mentioned on the blog in the past, QR codes have been making a comeback as a mobile payments tool. That’s because QR codes are both versatile and universal– they can be printed out on physical paper and can be scanned by a range of devices across operating systems.

These attributes make QR codes the perfect tool to facilitate P2P payments and to implement low-touch checkout solutions at in-store points of sale. Earlier this year, PayPal partnered with InComm to launch its QR code technology at pharmacy chain CVS. Just last month, Fiserv teamed up with PayPal to enable businesses to use QR codes to offer touch-free payments at the point of sale on Clover devices. And yesterday SafetyPay began enabling users to use QR codes for real time payments in Brazil.

These use cases, combined with the increased demand for low- and no-touch payment options, are fueling the rise of the QR code.


The case for digital is a no-brainer these days, as consumers have shifted their habits to conduct not only their shopping but also many other aspects of their daily lives online. When brick-and-mortar shops were closed, consumers were left with online shopping (and therefore payment) options.

It is clear that, even as the pandemic winds down, consumers are maintaining these digital-first habits. In fact, shoppers of all ages and demographics are more comfortable paying online than before.


With the increase in digital comes the increase in embedded payments and embedded finance. Retailers and service providers have figured out that the more seamless they make the payments experience, the less friction will interfere with the customer experience and the more the customer will return.

By saving users’ payments credentials, ridesharing services, food delivery companies, and even online grocers increase the chance of a return purchase. It also provides the retailer with more data and offers enhanced data surrounding consumer habits.


When it comes to security, with more data comes more responsibility. On the flip side, the extra data also brings additional visibility into consumer habits. From bank’s and merchant’s perspectives, this visibility can help them personalize products, services, and even the client experience.

Visibility into consumer spend data also helps banks and merchants anticipate customers’ needs and may enable them to more efficiently market up-sell and cross-sell opportunities.

On the consumer side of things the increased data can help them plan, budget, and manage their spending when the right tools are provided. Even technology as simple as purchase notifications can not only increase shoppers’ awareness of where their money is going, but also can help them prevent fraud.


It is becoming increasingly clear that in the banking and fintech space, no player is an island. By collaborating with other players, both banks and fintechs can maximize their competitive advantages by sticking with their core competencies.

So far this year, we’ve seen multiple successful bank-fintech partnerships, including this week’s mash-up between Ally Financial and buy-now, pay-later player Sezzle. Other headline-worthy mash-ups, such as Apple’s partnership with Goldman Sachs, highlight the benefits of leveraging others’ strengths, even when they appear to be a competitor on the outset.

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Banks Battle with New Competitive Advantages

Banks Battle with New Competitive Advantages

What happens after the newest cutting-edge banking technologies become table stakes? Banks move on to tackle another new technology.

In fact, in the past decade or so, banks have been constantly moving from one new technology to the next– from remote deposit capture to merchant-funded rewards, roboadvisory services, AI-informed marketing strategies, and finally on to complete digital transformation.

So now that 2020 served as the year of digital transformation, what’s next? How will banks use their limited resources to get ahead of the curve? Below are a few areas in which banks are focusing their attention to gain competitive advantage:


Last year we saw multiple financial services organizations update their communication technologies in tandem with digital transformation. But the game of facilitating customer communication is far from over. As Ron Shevlin pointed out in his piece, Every Bank Needs A Chatbot (Or Two) For Its Digital Transformation, chatbots are no longer simply a novelty. Instead, these tools offer fast turnaround for customer inquiries, provide additional data about consumers, and help firms hold personalized conversations with clients.

Another communication enhancement comes in the form of leveraging popular third party apps to communicate with customers. Axis Bank, for example, India’s third-largest private sector bank, recently announced a partnership with WhatsApp. Customers can now use WhatsApp to inquire about their account balance, recent transactions, credit card payments, deposit details, and block their credit or debit card.


Ready or not, crypto is here! In January, the U.S. Office of the Comptroller of the Currency (OCC) published an interpretive letter detailing that banks can transfer stablecoins to other banks. While banks haven’t been rushing to leverage this functionality, there have been a few moves that indicate financial services are slowly entering the cryptocurrency game.

First off, marketing services company Kasasa unveiled plans to help its bank and credit union clients provide bitcoin wallets to their consumers. Additionally,  Mastercard recently announced it will allow merchants to accept payments in cryptocurrencies, and BNY Mellon agreed to begin custody of cryptocurrencies.

Payment tools

With so many payments moving online in the past year, banks need to be even more aware of their role in the online payments flow. In fact, the recent rise in embedded payments poses a risk to banks as third party apps such as Uber and DoorDash make the payment element of a transaction almost disappear.

There’s also been a lot of competition in the booming buy now, pay later (BNPL) space, and not just from third party fintechs like Klarna and Afterpay. Last year, Citi announced Citi Flex Pay, a product that enables cardholders to pay for select purchases over time at a lower interest rate than their card’s purchase rate. And in 2019, JPMorgan Chase launched My Chase Plan, an offering that allows cardholders to make equal monthly payments on purchases of $100 or more with no interest, just a fixed monthly fee.

Offering another tool to make payments more flexible, is U.K.-based fintech Curve. The fintech connects with consumers’ existing payment cards to offer rewards as well as a Go Back in Time feature that lets users switch payments from one card to another for up to 14 days after the purchase was made.


If you’re not green, you’re gone! O.K., maybe not quite, but in the past few months we’ve seen an increase in fintechs working toward a more sustainable future. In fact, just this month there have been multiple headlines that highlight fintech’s green future. First, U.K.-based digital bank Starling Bank launched recycled plastic debit cards. Second, Citi began restricting financing for companies expanding coal power. And finally, Meniga partnered with Iceland’s Íslandsbanki to integrate Meniga’s Carbon Insight into its digital banking solution.

Fintechs are also helping consumers do their part to minimize their impact on the environment. Aspiration, for example, ensures accountholders that their deposits won’t fund fossil fuel projects like pipelines, oil drilling and coal mines. The startup also works with reforestation partners to plant a tree when users roundup their purchase to the nearest dollar. And speaking of trees, Treecard offers a wooden Mastercard and donates 80% of its profits to reforestation efforts.

Five Things to Know About CBDCs

Five Things to Know About CBDCs

By now you’ve likely heard of Central Bank Digital Currencies (CBDCs). With consumers’ lives taking place increasingly online and the recent boost in cryptocurrency usage and value, much of the global economy is ready to move from discussing CBDCs to formally implementing a CBDC strategy.

But though there has been some progress in this area, there is still a lot of confusion in the broader banking and fintech community. If you’re feeling a bit behind on the CBDC discussion, here are five things to know that can help you catch up:

Six countries are currently piloting CBDCs

While much of the world is struggling to wrap their heads around CBDCs, some countries are ahead of the game and already have pilot programs in place. Of these, the most well-known is China, but Thailand, the Republic of Korea, Ukraine, Sweden, and Uruguay are also actively piloting CBDCs. Additionally, Brazil reports it plans to formally launch its CBDC next year.

A handful of countries, including Canada, Venezuela, Cambodia, South Africa, and the UAE have made key developments with their CBDC programs.

Other countries are still in the research phase or have had no development.

Check out this interactive map from the Atlantic Council to learn more about each country’s progress.

CBDCs don’t necessarily need the blockchain

Many people associate CBDCs with Bitcoin, which can be a helpful way to think of distinguishing Central Bank currencies from fiat money in digital form. But while Bitcoin leverages the blockchain, CBDCs don’t necessarily need to.

That’s because blockchains are used when there is no central party to provide trust. When central banks serve as the trustworthy authority, however, this decentralization is no longer necessary.

In fact, according to a survey conducted last February by the U.K.’s Central Banking Magazine, only one reserve bank said that they planned to use a blockchain for the structure of distributing their CBDC.

There are two types of CBDCs

Many people don’t know this, but there are actually two types of CBDCs– wholesale and retail. Wholesale CBDCs facilitate clearing operations between the central bank and its member banks, while retail CBDCs are for the general public to use, taking the place of the bank note.

There will still be room for cash

CBDCs will work alongside cash, or fiat currency. While there are both negative and positive aspects to paper money and coins, there will still be a cash economy. CBDCs simply combine the convenience of a cryptocurrency with the stability and regulation of fiat currency.

CBDCs won’t harm banks

As Chris Skinner highlighted in a blog post recently, CBDCs have the potential to disrupt banks to the point making them obsolete. Because CBDCs are issued digitally, they could technically circumvent banks.

Skinner concludes, however, “The true role of banks, whether in a digital currency or cryptocurrency world, is to store and exchange value with trust. That’s why they’re regulated the way they are and why they exist the way they do. And that isn’t going away anytime soon.”

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