Why Hasn’t Finance Become Social?
January 10, 2022
There’s a great scene in The Wizard of Oz, perhaps one of the most iconic moments in cinema:
It happens when Dorothy survives the tornado, crash-lands in her house, and investigates her surroundings. While everything is in black and white (as all movies were up to that point in 1939), she opens the door to find a technicolor world with bright blue sky, green grass, and of course, a yellow brick road.
The age of digitization and internet-of-things (IOT) experienced a similar transformation. Social media connected people around the world, and when these technologies were applied to different industries, everything became inextricably linked.
The fitness world went online, and companies like Peloton brought elite gym instructors into people’s homes.
The video gaming world birthed Steam, the ultimate platform for discussing and creating gaming experiences. (Shameless plug: we are working on a potential partnership with Twitch, so stay tuned!)
The music world blended Napster and iTunes to create Spotify, which lets users become tastemakers and collaborate on playlists.
The financial world…
Um, hang on a sec. The financial world made —
Let’s just check our notes here. The financial world built…
Excuse us, it seems we don’t have a good answer here, because the financial world — really isn’t that social in the first place.
But why is that? We have a few theories which we’ll briefly unpack below.
Take a Closer Look at Today’s Institutions
Banks haven’t had the best portrayals over the years.
In the classic movie, It’s a Wonderful Life, Mr. Potter, the selfish grump who only cares about making money, is aligned with the “bank” While the main character, George Bailey, is aligned with the opposing “Building and Loan”. Bailey fights against Potter to give his neighbors the opportunity to have somewhere else to go for financial help without having to deal with the corrupt old man only obsessed with his pile of coins, who didn’t care about anyone around him, and didn’t want to change.
And today, it’s no secret that large banks earn a tremendous amount of revenue. One piece of that is overdraft fees, which generated over $12.4 billion in 2020.
Worse yet, a large percentage of those fees were paid by BIPOC (Black, Indigenous, and People of Color) families, who accrued $4.5 billion in overdraft fees last year.
Consumers need a forum — a gathering place — for people to share ideas, to collaborate, and to help each other financially. Making finance social will fill this need.
The Rise of Fintech
It’s exactly this kind of cavalier attitude that birthed the burgeoning world of fintechs — “Financial Technology” companies.
These firms include payment processors like Stripe, “buy now, pay later” pioneers like Klarna and Affirm, and investing apps like Robinhood.
Each of these companies was each launched to bring amazing services to the average consumer. In the technical parlance of the day, they “unbundle” services that premium, white-glove banks typically offer and make them available as a standalone service for just a fraction of the cost. This revolution is effectively democratizing finance for the masses.
Beyond the financial services they provide, fintechs also deliver a community that seems to increasingly define our digital world. These products provide a forum for meaningful connections, create an atmosphere for value-added conversations, and deliver a social interface that extends well beyond the limitations of the 9-5 workspace.
In some circles, these fintech services put forth a “social+” product, an extension of social commerce apps developed in China (including Douyin, or as its known by Generation Z; TikTok). As venture capital firm Andreesen Horowitz recently declared, “The best version of every consumer product is the one that’s intrinsically social.”
Consumers have jumped in with both feet. Meanwhile, in his 2020 letter to shareholders, Jamie Dimon, CEO of JPMorgan Chase, acknowledged that fintechs pose an “enormous competitive threat” to their legacy business models.
While banks are still considering making finance social, entrepreneurs across the globe have confidently taken their place.
We’re Flypping the Script
Our vision is simple: To financially liberate people. That’s why we exist.
At Flyp, we believe you (and your friends) should be able to level up in your financial life; the same way you would in a video game or on a Peloton.
Empower yourself financially with our debit card, that rewards you on every swipe*. Refer and empower your friends, and you’ll receive even more rewards. Share your financial success and connect with the Flyp community on our forums and leaderboard.
What You Get With Flyp
As a Flyp card holder, we’re talking about getting up to 110% cash back on debit card* purchases, along with tons of other awesome rewards to sweeten the pot and flyp the script on banking. Oh, and did we mention that we will have leaderboards, forums to share social capital, and referral bonuses?
The future is here. The future is social. The future is Flyp.
*terms and conditions apply
Flyp is not a bank. Banking services provided by Sutton Bank, Member FDIC.
Flyp Visa® Debit Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.