FinTech Companies Featured on “60 Minutes”
We’ve known for a while now that FinTech was headed for the mainstream but it doesn’t get more mainstream than Sunday night on one of the big four television networks. That’s exactly where the industry recently found itself as a segment aired on CBS’s 60 Minutes featuring Patrick and John Collison of the payments startup Stripe. In addition to discussing the MIT and Harvard dropouts’ story the program also took a broader look at the FinTech revolution and how it’s changing the world of financial services.
Starting off with Stripe, the show shared the story of the company that sought to make e-commerce and sending money “as easy as sending e-mail.” This simple idea has taken the company a long way, bringing their valuation up to over $5 billion. In fact, whether they realize it or not, one in four Americans have utilized Stripe’s services in the past year. Like many FinTechs the company’s success has allowed them to set their sights to other banking issues that they might want to tackle down the road.
The 60 Minutes segment also took a quick glance at how other FinTech companies are “unbundling the banks” by offering improvements upon some of the main functions and services that traditional institutions offer. For example the show’s own Lesley Stahl touches upon everything from peer to peer lending and Lending Club to algorithm-based financial advisement and personal finance apps. They also took some time to highlight some of the benefits of FinTech that aren’t always discussed, such as assisting the 10 million Americans who can’t afford to have a bank account. As Vikram Pandit told Stahl when she was shocked to learn that banking is more expensive for poor people than for rich, “There are bank account fees on your checking accounts. There are commissions, there are exchange rates. It all adds up.”
Of course there is still a lot of suspicion about FinTech and some of those concerns were addressed as well. First Stahl questioned whether Stripe’s goal to make banking services cheaper could ultimately lead to layoffs and lost jobs at the big banks. “I think in general technology always sort of makes some jobs less relevant, or perhaps, even obsolete, but I will say that the idea that some of these people will find nothing else to do seems like it’s way too pessimistic on the capabilities of everyone as human beings, right?” Patrick Collison said in response. The program also brought up the myth that FinTech companies aren’t regulated before moving on to potential security issues. However Collison dismissed the notion that startups are any less secure than traditional banks, saying, “People have been trying to steal money for as long as money has existed and, the best we can– sort of– as a society hope to do is to design security in the most thoughtful and robust way possible.”
While the segment stayed firmly in the shallow end of the FinTech pool it did give viewers who have likely never heard of the sector a fairly good introduction. And while it did bring up the possibility of startups and big banks working together, the brothers from Stripe did strike a somewhat more defiant stance on the issue. In fact John Collison may have had the quote of the night by saying, “When you have a major technological shift like this, it’s not clear that automatically the existing financial players are the ones who are gonna win.” Although it may currently be a David and Goliath-esque struggle as the show described it, perhaps it won’t be long until the roles are reversed with FinTechs becoming Goliaths at the expense of out of touch traditional financial institutions.