The stability of financial institutions has come into stark relief over the past couple of weeks due to seemingly overnight bank runs and failures, leading consumers and investors to hastily reassess their trust in traditional banks. There is a silver lining, however, in that this era of financial innovation has given rise to a new wave of financial technology companies that can chart a different path by prioritizing a broader set of stakeholders. Fintech companies have the unprecedented opportunity to become stewards of trust—by ensuring that corporate decisions are made with consideration given to delivering confidence to consumers, regulators, and society as a whole.
Over the past century, financial services firms have repeatedly squandered the trust and confidence consumers have placed in them. For instance, during the Savings and Loan Crisis of the 1980s, hundreds of Savings and Loans (S&Ls) failed, with a total cost of $160 billion, of which $132 billion was shouldered by the American taxpayer. Consumers lost confidence in the system, and the fallout of that crisis still reverberates today. Similarly, the 2008 financial crisis (now known as the Great Recession) exposed the failure of major banks to prioritize the interests of customers and society as a whole, leading to widespread economic devastation.
The recent events involving Silicon Valley Bank, Signature Bank, Credit Suisse, and other banks, although not necessarily indicative of a larger, systemic crisis, are clear examples of failed opportunities to win consumer trust. This era of financial innovation presents the latest opportunity for companies to chart a different path from preceding financial services businesses and prioritize a broader set of stakeholders.
At Finalis, we believe that corporate decisions should prioritize delivering confidence to consumers and society as a whole. To achieve this, we maintain a close and transparent relationship with regulators, provide a great user experience, and meet a higher standard than traditional software or SaaS (software-as-a-service) companies. Finalis wins confidence by maximizing the trust that our users have in us front and center to everything we do. However, we keenly understand that we can lose confidence when any one or more of those elements goes awry. Therefore, we constantly strive to improve and maintain our highest standards of performance and service.
Fintechs have a profound responsibility and opportunity to build platforms with a baseline of transparency and trust. By taking a different path from preceding financial services businesses and considering a broader and more holistic set of stakeholders, we can deliver confidence to consumers and society as a whole for the long run.
That quote attributed to JFK, about the Chinese word for ‘crisis’ being made up of the characters for ‘danger’ and ‘opportunity’—which has become a trope nowadays, especially in business circles—is actually inaccurate, according to Prof. Victor Mair, a University of Pennsylvania China expert. Cliché or not, however, it remains an apt notion; there is indeed opportunity in the midst of crisis, even in the example of the present moment in the world of finance. For us at Finalis, that opportunity resides in the renewed effort to deliver the confidence and trust that, at the end of the day, remains our most valuable currency.