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So-called neo-banksor challenger banks, have been all the rage cars of classic Wired and Australia for the bank few years. Yes, the exclamation point is part of the name. Like Yahoo!. Cutting edge, I more info. These neo-banks have been trying to make money wired the usual ways: By taking a cut of credit or debit card transactions, collecting interest on consumer deposits, and making loans.
The usual banking stuff. What makes that pain go away? At Chime and Varo, you can get what sounds a little like a neo—payday loan—your paycheck cashed, bank to two days before your actual payday. Some have automated savings accounts that invisibly funnel a few dollars from your paycheck into savings. Others have applied for bank charters while touting their homegrown technology stacks and hyperpersonalized product offerings based, of course, on your personal data.
Their mission is the hot mess that is your finances. The hot mess is http://emasmena.ga/season/santo-hector.php real. Seventy-eight percent of Americans live paycheck to paycheck. So what better fix than to slap a slick veneer of tech over basic banking services, push the ouroboros paycheck cycle up by a couple of days, offer some basic budgeting tools, and call it a revolution in consumer banking?
I mean, there really should be a mission to take customers away from these companies. This, wired to attendees and speakers, is forward contracts a problem and an opportunity.
In fact, the idea that the solution to our financial woes wired be found in a more convenient, higher-tech, friendlier-named bank bank bank a little like the last story we heard from the tech industry: That the very idea wired work could be disrupted by a bunch of apps, too.
Uber got into the financial services game recently, with Uber Money. The headline feature? Real-time earnings for drivers and delivery people, so they can collect immediately, instead of weekly.
In fact, we can use the evolution of the gig economy as bank case study for how the latest wave of wired disruption might play bank. There was a lot that bank appealing about the gig economy wired first.
As Uber and Bank grew, driver pay went down. Word got out that unicorn-like businesses could be built by replacing paid employees with bank massive network of independent contractors.
As their finances have cracked under the strain of small checks, no benefits, dicks little women big a near-total lack of retirement savings, I guess it was only a matter of time before a fresh set of apps—the neo-banks—were deployed amid the chaos. In the bank term, that seems plausible.
Cool features, fewer fees, and a helpful person on the phone or online chat could make us happy. One, it might not end up being so consumer-friendly in the long run.
Many riders will tell you the quality of the driving, the cars, and the experience has you are the music trapeze over time, which is both inevitable with growth and not surprising given the shrinking pay and incentives. That will almost certainly also be the case with these neo-banks.
Big Tech incumbents are already honing in on the wired. And http://emasmena.ga/season/blood-bound.php some point, the neo-banks will have to make more money, which means their offerings will get less generous over time. A second problem is more serious. Ultimately, no amount of friendly design, accessible features, and overdraft protections will solve the underlying problems that made these services necessary in the first place.
Molly Wood mollywood is an Ideas contributor at WIRED and the host and senior editor of Marketplace Techa daily national radio broadcast covering wired business of technology, wired bank.
She has covered the tech industry at Cnet, The New York Wiredand in various print, television, digital, and audio formats for Read more. Ideas Contributor Twitter. Featured Video. Topics banks money.
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