Goldman Sachs is getting into the online- and app-based consumer loan business, according to the New York Times. You might be able to get that loan to build your deck or buy that truck online direct from the megabank.
But it’s hardly blazing a new trail. FinTech, as the startup world has dubbed the arrival of disruption to the financial services industry, has been moving along for years. Just like Amazon took the store out of bookstores and Netflix busted Blockbuster, a swarm of firms like SoFi, Lending Club, On Deck, Betterment, Motif Investing and Loyal3 has been trying to undermine the business models of traditional banks by offering some kind of marriage between new technology and financial services.
Larger banks have been slow on the uptake for several reasons.
“They haven’t had huge incentive to come into the market space,” says Mike Cagney, CEO and co-founder of SoFi, a firm that offers algorithm-driven online lending and securitization of high quality loans, and who by his own account wants to make it possible to one day “fire your bank.”
Cagney says large traditional banks have been complacent doing business as usual with baby boomers and have overlooked a major opportunity: underbanked, financial-maturity-delayed millennials.
“It’s a false premise that when someone’s 45 they want to into a branch with bad hours and crappy product and service. That’s not how it works – 70 percent of millennials would rather go to the dentist than go to the bank,” says Cagney.
Another constraint facing traditional banks: the fact that they’re banks. “If you’re classified as a bank, there’s a whole set of regulatory burdens that fall on your shoulders that make it hard to move fast,” says Rita Gunther McGrath, professor of management at the Columbia Business School.
The rules on deposits control how banks do all the other things they do from remittances to mortgages. Startups with nifty ideas on how to offer any one of those services without having to carry deposits don’t have to abide by those rules.
Lastly, banks have been slow to innovate for the same reason that humans have always been slow: inertia.
“It’s true that in more recent times certain types of innovation were allowed to run amok,” McGrath says, but largely in terms of the products offered to consumers, “most are the same as they were 30 years ago.”
Innovation can attract regulatory attention and doesn’t fit comfortably with financial models. “Breathing in and out and doing your job every day is a safer bet,” McGrath says.
Grant Easterbrook, co-founder of Dream Forward Financial, a disruptive startup in the retirement savings space, says innovation at large institutions with a lot of stakeholders is “just hard to do until it becomes blindingly obvious.”
All the same, banks do have some serious advantages: “Millions of accounts to tap into, lots of money to spend that startups don’t have. They just need to get moving on it.”
There is no crop that has had a trajectory as steep as the avocado. Since 2010, consumption has gone up between 10 and 30 percent every year, which is one reason why avocado prices are increasing. Dan Stone recently wrote a piece called "Thanks to America, We’ve Reached Peak Avocado" for National Geographic.
Facts about avocados:
- Mexico produces 10 times more avocados than the U.S. and Indonesia combined.
- The rise of avocado’s popularity is unsustainable. Avocados have been grown for thousands of years in South America, but as demand increases, the farmers can’t afford to eat their own crop anymore.
- It takes about 100 gallons of water to produce a pound of avocados … that’s about an entire bathtub of water for one avocado.
- Almost three-fourths of Mexico’s crop comes from the state of Michoacan, where avocados are becoming currency in the drug war. The fruit is referred to as "oro verde," or green gold, and has replaced hard drugs like cocaine and heroin as the currency of the cartel.
To read Dan’s story on avocados and see more food coverage, visit natgeofood.com.
You’re forgiven if you’ve not been paying attention to the daily back and forth of negotiations between Greece and its European creditors to release a bucket of bailout money Greece needs to pay its bills, avoid default and stay in the eurozone.
“It’s complete Groundhog Day,” says Mujtaba Rahman with the Eurasia Group.
The situation looks very similar today as it did months ago — Greece and its creditors are in a standoff. The creditors want big economic reforms, like pension cuts. Greece’s prime minister was voted into office on a promise to fight those measures.
The difference now is the timing and the level of tension. Greece is running out of soft deadlines it can blow past and facing real do-or-die funding crises with payments due at the end of June and in July.
“Essentially, over several days or so, we’ve seen the creditors snap,” says Nicholas Spiro, of Spiro Sovereign Strategy. “Whilst there was very little trust between both sides to begin with, we’re pretty much seeing the end of negotiations.”
Greece’s Prime Minister Alexis Tsipras said Tuesday that the International Monetary Fund bears a “criminal responsibility" for the situation. He’s heading to Russia later this week, perhaps cozying up to President Vladimir Putin – just in case.
“We’re at the 12th hour, more or less,” says Douglas Elliott, a fellow at the Brookings Institution.
However, Elliott thinks things might need to start tangibly falling apart in Greece before its leaders are able to compromise.
The U.S. team, which plays Nigeria tonight at the Women's World Cup, is a tournament favorite. But Nigeria's funtastic fans deserve a cup of their own.
Clinton never moved back to Park Ridge, Ill., but when she talks about the America she wants to build, you can hear hints of what that suburb was like in the 1950s.
Amazon on Friday debuts Catastrophe, a comedy about an American man and Irish woman united by an unexpected pregnancy. NPR TV Critic Eric Deggans says it's a wonderful, fresh vision of romance on TV.
The U.S has sent humanitarian aid to help Syrian civilians, but only a small number of refugees have been allowed into America. Now the U.S. says it will increase the number of those admitted.
In an extremely polarized Congress, last week's trade vote yielded an unusually haphazard-looking mix of votes. Here's a breakdown of how the House voted and why it matters.
The College Board won't score two of 10 test sections after a printing error on the instructions for the exam given earlier this month.
Kerkorian founded MGM Resorts International and helped revitalize the Las Vegas Strip.
A series of low-profile court rulings culminated with a Supreme Court decision this month that says limiting marriage to a man and a woman was discriminatory and in violation of the constitution.
The agency is giving food companies a hard deadline to stop using trans fats in processed foods. It has determined that partially hydrogenated oils are not "generally recognized as safe" for food.
The storm made landfall on Matagorda island, south of Houston, according to the National Weather Service. Maximum sustained winds were recorded at 60 mph.
Researchers watched a group of young adults as they tried signing up for insurance on HealthCare.gov. Half didn't know what a deductible was. Needless to say, they struggled with enrollment.
Omar Gonzalez, 43, has been in prison since last September, when he ran onto the grounds of the presidential residence and entered a White House door on a Friday evening.
The breach is said to have occurred last year and to have centered on proprietary information about players and team operations.
Candidate number 16 entered the race with a passionate speech Tuesday touching on Obamacare, free trade and the U.S.-Mexico border and beating China.
Labor unions argue it's yet another deal that will erode American jobs and benefit corporations. But labor specialists say there's a flip side: Companies more engaged in global trade pay higher wages.
The House is voting once again — but it's just a procedural vote. Trade supporters want to give themselves six more weeks to find a way to reach agreement on a trade package.
After taking the stage to a sustained ovation as the song "Keep on Rockin' in the Free World," Trump laid out a list of things he would fix if he were in charge.