The financial services industry moves so much and so fast. 2019, particularly the final stretch of the year, marked the beginning of the next wave of disruption that the disruptors have worked so hard on since the 2008 financial crisis that gave them the impetus to make changes. More than ever, banking is moving away from existing as a standalone destination for financial help; it’s integrating with retail, social media, career coaching, and experiences. By next year you could be banking with Google or Uber, and instead of moving dollars around you could be thinking about new currencies issued by other governments — or Facebook. Here are five themes to watch in 2020.
The rebundling of financial services
For the last 10 years, startups have been unbundling financial services and consumers have sought out individual apps for different financial products — loans, investments, savings accounts, debit cards, credit cards — rather than one-stop-shop banks that provide all of it. Now, at the end of 2019, several such disruptors have achieved enough scale to venture beyond their initial single-product offering which they hope will help them with customer retention. Square’s Cash App, which began as a person-to-person payments app, is a perfect example: it now functions as a digital bank to deposit cash, includes spending rewards, crypto investing, and now also stock investing. This type of rebuilding will accelerate even more next year as new and younger customers demand better and more immersive experiences, and startups who took off with freemium products seek to grow revenue. As part of this trend, niche target demographics will emerge, like the farming or trucking industries or the LatinX community.
The battle for e-commerce
More and more, lenders like Kabbage, Fundbox, and SoFi are offering payments products to customers to diversify their revenue streams and strengthen their value to their customers. At the same time, payments companies like PayPal, Square, and Stripe are growing their capital arms for the same reasons. They’re working to democratize commerce, making it so that all of commerce doesn’t just funnel through a handful of large, powerful e-commerce platforms on which small businesses have to depend. Next year, point-of-sale lenders like Affirm and Klarna will add new products to capture the e-commerce financial landscape while Shopify, Brex, and Stripe will battle to be the primary lender to emerging e-commerce brands. Plus, Affirm and PayPal inched into discovery shopping for consumers this year.
Big tech as financial services distribution channels
This year, Instagram launched a checkout function powered by PayPal, Google unveiled plans to launch a checking account, Uber launched debit cards and instant payouts, and Facebook rolled out a Venmo-alternative. JPMorgan Chase is also developing an e-wallet for online marketplaces and gig economy companies like Amazon, Lyft, and Airbnb that would allow them to provide consumer bank accounts and incentivize customers to keep their money parked there. As consumers force tech giants to value data and privacy over ad targeting, payments offer an opportunity to grow new revenue. Global payments are on track to add $1 trillion in new revenue to payments businesses through 2027, according to BCG. As for the bank accounts, it could take years for the public to become okay with the idea of a Google-type non-bank as a go-to for banking.
The financialization of cryptocurrency
There will be more integration of different cryptocurrency products and services alongside traditional financial services, like SoFi and Robinhood, which were approved for BitLicenses this year, as well as Square’s Cash App. Companies like BlockFi and Lolli are starting to let people do things with cryptocurrencies that they’re already used to doing with traditional assets, like letting them store their crypto in interest-bearing accounts or earning cash-back rewards on purchases in crypto rather than fiat. That integration will continue to drive cryptocurrency adoption through 2020. Traditional banking institutions will also realize the value of stablecoins in lowering costs and improving consumer experiences and will create incentives to drive usage.
No Libra launch, but more regulatory clarity and perhaps a new currency war?
If Libra showed us anything this year, it’s that regulators see Facebookcoin as much more threatening to government currencies that they ever saw bitcoin or cryptocurrency. The Facebook-started digital currency dominated headlines this year after its June reveal and its leaders have assured the public it won’t launch until regulators’ many concerns are put to rest. Libra may launch after all, but likely not in 2020. However, Facebook, the Libra Association and its many members have opened a conversation that’s sure to bring additional, though perhaps limited, clarity in 2020 about how to regulate cryptocurrencies. As another response to Libra, the central banks of China, England, and the European Union, among others, are now discussing their own digital currencies or stablecoin projects. If any of those take root in 2020 it would set the stage for a new currency war whose coins could become bigger than bitcoin.
Emma Searson, an author on the just-released Renewables on the Rise report and the director, 100% Renewable Campaign at Environment America, joined Cheddar to discuss the rapidly growing renewable energy sector. Between 2011 and 2020, the report shows that wind, solar, and geothermal energy production grew about 15 percent annually and that wind and solar alone account for 11 percent of electricity in the country. "There are a few really important drivers of the renewable energy progress that we're seeing all across the country," Searson said, highlighting falling prices, technology improvements, and supportive policies.
Wendy O, host of 'The O Show' joins Cheddar News to discuss the recent rally from cryptocurrency, Ether. She also discussed incoming New York City mayor Eric Adams wanting to teach kids crypto in schools.
Professional sports is facing a reckoning right now over several stories painting an ugly picture of a toxic work environment, encompassing multiple teams in multiple leagues and dealing with different issues.
This week, the NHL's Chicago Blackhawks ousted their general manager and senior director of hockey operations after an investigation confirmed former player Kyle Beach's claims that the team's former video coach Brad Aldrich sexual assaulted him back in 2010, with upper management ignoring his claims until after the team won the Stanley Cup that season. Last night, Joel Quenneville, now the coach of the Florida Panthers but Chicago's coach that season, stepped down from his post.
This comes just a few weeks after the NFL was rocked by leaked emails showing now-former Las Vegas Raiders Head Coach Jon Gruden using racist, sexist and homophobic language. He resigned soon after the emails came to light. We can't forget, though, that those emails come from a much broader investigation of the toxic work environment in the offices of the Washington Football Team. NFL Commissioner Roger Goodell said this week the league wouldn't publicly release anything from its investigation of the team, but lawyers for many of the women interviewed in the case say they want a public report.
And last January, just one month after hiring him, the New York Mets had to fire then-General manager Jared Porter, who admitted to sending explicit, unsolicited texts and images to a female reporter in 2016 when he worked for the Chicago Cubs. ESPN had been in possession of the texts since 2017, but the woman in question asked the network not to run the story out of fear her career would be harmed. She only reached back out to ESPN after she left the field of journalism altogether. Porter has been banned from the sport through next season.
If you believe in the phrase "where there's smoke, there's fire," professional sports is a five-alarm blaze.
Julie DiCaro, senior writer and editor at Deadspin, joins None of the Above to discuss.
Curaleaf CEO Joe Bayern joined Cheddar's "Closing Bell" to discuss the cannabis company's Q3 earnings report, which came in under expectations and included widening losses. Bayern discussed taking a hit on profitability based on the slower-than-expected expansion in some Northeast markets. While the company reduced its fiscal guidance for 2021 due to a general slowing of the cannabis market, he did note that he still sees much room for growth in 2022 and beyond.
Online consignment and thrift shop thredUP reported a Q3 earnings beat on Monday, and CEO James Reinhart joined Cheddar to discuss exceeding expectations and the state of the business overall. Reinhart said the company is thriving while other businesses may face supply chain issues due to the convenience of its system of acquiring secondhand clothing. "In a world where most consumers are feeling squeezed by prices and seeing apparel shortages, everything we have on thredUP is 100 percent in stock and ready to ship," he said. "And so I think it speaks to real opportunity for resale and a company like thredUP during the holiday season and into 2022."
Former NBA star, commentator, and entrepreneur Baron Davis and Deluxe Corporation Chief Brand Officer Amanda Brinkman, joined Cheddar to discuss Season 6 of the reality show "Small Business Revolution," premiering Tuesday. The season will focus on helping six Black-owned businesses in the Twin Cities, Minneapolis and St. Paul. Davis noted learning about the lack of resources, connections, and opportunities for Black business owners during the show. "There are so many things we need to do as a society to address racial injustice and inequity, however, one of the ways for it is economic empowerment," Brinkman added.
Katia Beauchamp, strategic advisor for FemTec Health and former Birchbox CEO, joined Cheddar to discuss the health and beauty sciences company's recent acquisition of subscription beauty supply provider Birchbox. She noted that FemTec wants to change the perception of the brand to include health as well as beauty. "This is something where we are reimagining how can we help consumers discover beauty products that really help them take great care of themselves, have beautiful underlying health that is shown on the exterior too," she added.
Cryptocurrencies are getting off to a good week. Ethereum surged more than 4% in 24 hours on Monday, hitting a new all-time high above $4,700. Meanwhile, Bitcoin surged 7% to a price of $66,250. Haohan Xu, founder and CEO of Apifiny, joins Cheddar News with thoughts on the growing sector.
The latest Marvel movie hit theaters with one of the biggest opening weekends of the year. 'Eternals' opened over the weekend with an estimated $71 million, the fourth-best domestic debut this year. Erik Davis, managing editor at Fandango, joins Cheddar News to talk about the state of box office sales.
