The First Week of August, 2018

US Policy Edition

Editor's Note: The faiV hiatus continues. This week's edition is edited by John Thompson, Chief Program Officer at the Center for Financial Services Innovation. Next week, we'll have one more guest editor before I climb back in the saddle.--Tim Ogden

1. FinTech Charters: Just as the industry takes off for summer vacation, the US Treasury Department released its long-awaited fintech report and the OCC issued a call for fintech charter submissions. I’ve spent the past week sorting through scores of analyses and reactions. Here's American Banker on takeaways from the Treasury report and from the OCC's announcement. What does this mean for all things financial inclusion and innovation? Well, it certainly opens the door for many providers to expand their reach and their potential impact. It will likely be an expensive and involved path, but one that could ultimately give some fintechs much needed lift. However, this is still early in the game. I would expect to see lawsuits and challenges from incumbents now that the charter program is official.     

2. Financial Stress and the Lunar Cycle: For many consumers, the end of the month represents constant instability as accounts are reduced to zero and bills become due.  While income volatility is the umbrella issue, the specific actions that trigger this instability on a cyclical basis live both in our minds and in the products we use.  One of our Entreprenuers-in-Residence, Corey Stone, tackles some big thinking on the topic in his series End of the Month. Drop in regularly to learn more about how human behavior can lead to suboptimal decision making, why long accepted product standards lead to this paucity of funds at the end of the month, and other insights into our monthly budgeting woes.

3. The Gig Economy: The difference between 4% and 40% is pretty significant. And the fact that the US Government doesn’t know how big the gig economy is, in short, a problem. To be fair, it’s not all the government’s fault. The variance in numbers can be attributed to a wide range of perceptions about what constitutes gig employment: full-time, part-time, etc. But no matter what the measurement, the impact is real. Gig employees enjoy the benefits of self-determination, but can often miss out on many of the benefits of traditional employment like insurance, savings vehicles, and more. The result can be regular cash flow gaps and challenging financial tradeoffs. To better design products and create guardrails, it’s imperative that we all find a better – more credible – way to measure this new workforce reality.

4. Fintech Flyovers: Who knew that Dwolla was launching a Midwestern Movement way back in 2010 when it opened its doors in Des Moines. Since then, the Midwest has caught more than its fair share of attention for entrepreneurs, incubators and investors. Drawn by a low cost of living and a relaxed measure of success, companies can stretch a dollar further and pursue a longer term growth plan. Of course, it has its challenges with recruitment – but quality of life seems to be winning out. I can personally attest to the lure as CFSI is headquartered in Chicago and I am a fintech founder from and long-time resident Kansas City. This Midwestern potential will only gain steam with the new OCC fintech charter. Mary Wisniewski tracks this and much more in her most recent piece from American Banker.

5. What We're Slacking About at CFSI: Spies: they are just like us. Who knew that financial health is an issue for international agents? Summer means vacation time, but are you among the millions of US workers who feel like a week isn’t enough to truly dial down the stress of the workplace? Try scheduling vacation bookends. Wearables have made a huge impact on measuring physical health (and giving us all an excuse to get up and walk around throughout the day without looking thoroughly out of place). We’re carefully watching the launch of the “Fitbit for Financial Health” to track similar outcomes.

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