The Big Ideas Fintech Will Tackle in 2021

For our last edition of the year, the a16z fintech team weighs in on the big ideas they think fintech will take on in 2021. Check out our big ideas from last year here.

Disintermediating the banking system

The reason PPP has fallen short and many stimulus checks went unsent this year is that, when it comes to money, there is no direct connection between consumers and government. Instead, banks serve as intermediaries. Very few people directly own U.S. government bonds, for example; they earn interest from the banks that own them. Consumers don’t borrow money from or deposit money with the Fed; their banks often do when handling “excess reserves.” Sending a wire means interfacing with “Fedwire,” but only banks can access that, not consumers. If you have a “conforming mortgage” you effectively got your mortgage through the government — except it went through many intermediaries first.

In 2021, I believe we’ll see the beginnings of the disintermediation of the banking system. Though private banks can and do perform a valuable function in every economy (and I believe “postal banking,” a.k.a DMV banking, is a terrible idea!), when they merely serve as a “front end” to the central bank, they insert more bureaucracy and fail to accomplish monetary policy goals. Fintech represents the most powerful tool that governments have to make monetary services available directly to their own citizens, benefiting consumers equally in the process.

Today almost 5 billion humans have mobile phones, 80 percent of them smartphones with internet access. Amazon has rendered much of retail obsolete; this process is quickly happening to banks, as well. The bank branch is an anachronism. Eventually, every consumer will access their savings, loans, and investments via a mobile app. This reshuffling of the deck is quickly being adopted by consumers — quicker still amid stay-at-home orders. But it should be appreciated even more so by governments, who can use such technology to eliminate unnecessary complexity and cut through bureaucracy.

If the borrower or recipient of money is the government, it makes no sense to filter it through legacy financial institutions first. Fintech has the power to advance monetary goals for consumers more efficiently and effectively

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Πηγή: a16z.com