July 9, 2020

Who Put the Target on Big Banks’ Back?

Traditional banking has 100% failed small businesses.

At least, that’s what our guest for this episode of Business Casual thinks. 

That guest, Fintech Today founder Ian Kar, names names and doles out hot takes re: the fintech space in our interview—which is itself an in-depth look at how fintech startups are stepping in where big banks have missed the mark in distributing Paycheck Protection Program funding.

  • If you listened to our last episode with the Aspen Institute’s Joyce Klein, you know that “missed the mark” is a generous way of putting what happened. 
  • This time around, we’re exploring the disruptors that took the reins for traditional banking, especially in the small business economy.

Kar explains that big banks have systematically failed to market to or serve small businesses and their owners. So what makes fintech different...and more capable?

  • A focus on relationships and a willingness to lend small
  • Deeply rooted and mutually beneficial partnerships with community banks
  • An appreciation for the “tech” half of fintech

But it’s not all roses and loan forgiveness in the fintech space. There are plenty of risks, both regulatory and otherwise. You bet we’ll cover them all.

Listen now.



Kinsey Grant, Morning Brew business editor and podcast host [00:00:07] Hey, everybody, and welcome to Business Casual, the podcast from Morning Brew, answering your biggest questions in business. I'm your host and Brew business editor, Kinsey Grant. And now, let's get into it. [sound of a ding]

Kinsey [00:00:19] In our last episode, I spoke with Joyce Klein, from the Aspen Institute, about why exactly minority-owned businesses have struggled to secure loans through the government's paycheck protection program. The program we lovingly refer to as PPP, and Joyce masterfully answered my questions and taught me a ton. I think one stat paints the picture well that I want to just drive home one more time. Just 12%. Twelve percent of Black and Latinx business owners who applied for PPP loans reported receiving what they asked for, according to a survey from Global Strategy Group in May. Nearly half of those business owners said that they anticipate being forced to close their business permanently in the near future because of that. 

Kinsey [00:01:02] In that conversation with Joyce, we tried to determine why that is—why it's just 12% instead of, say, 100%. And the answer is, of course, systemic. But, one of the biggest aspects of minority-owned business is lack of access to traditional capital stems from this lack of relationships with traditional lenders. If a business hasn't, say, previously secured a loan through one of the big banks charged with carrying out PPP lending, it was less likely that that business could get its fair share of government stimulus when it came time for the checks to go out. For me, that brought to mind the idea that we're in this seemingly endless loop. 

Kinsey [00:01:38] Those with relationships with banks continue to foster those relationships, while those on the outskirts stay on the outskirts. How is upward mobility in business possible if you never get a chance to shake the right hands? And that was striking to me. So, like a good startup employee, it got me thinking about the players trying to disrupt that loop to help those on the outskirts get where they need to be and help them get the money that they need to get to survive. Now, that disruption I'm talking about is coming largely care of fintech companies, these startups at the nexus of finance and technology. 

Kinsey [00:02:10] The words will give it away, often led by gregarious young founders and showered in all this funding from the sexiest VCs in Silicon Valley and New York, and the fintech companies are doing more than just competing for who can have the most startup-y name of this decade. They're actually affecting real change for small businesses that have traditionally been shut out of the vaults at big banks. So today, we're going to talk more about why fintech companies are vital to understanding the concept of economic justice, how they're serving the small business backbone of the U.S. economy. 

Kinsey [00:02:41] And because this is me and it's Business Casual, we're going to ask our guest about some of the drawbacks of fintech and all that it has to offer. So, I'm excited to welcome that guest to Business Casual. Welcome, Ian Kar. We're excited to have you. 

Ian Kar, Founder of Fintech Today [00:02:55] Hey, thanks so much for having me. Excited to be here. 

Kinsey [00:02:58] So, Ian is a friend of the Brew—we go way back. A founder of Fintech Today, which is a weekly newsletter analyzing the wide world of fintech. Ian, you've also worked at Acorns. You've covered fintech in a lot of different capacities. Consulted in the space as well. So you are the ultimate guest when it comes to talking about fintech. I'm excited to talk with you today. 

Ian [00:03:18] Yeah. Thank you so much. I'm super-excited to talk. I've always happy to chat about it. And I think the PPP is a really interesting topic, so I'm excited to dive in. 

Kinsey [00:03:25] Yeah. And I'm glad that we're talking about fintech through the lens of PPP. We've talked about fintech on this podcast before. It's a topic that's come up pretty frequently. But through the lens of PPP specifically, I think it's really, really interesting to understand some of the use cases for fintech startups. And before we get really, really into it, Ian, I want [laughs] to get a little bit of a framework here for how we should understand fintech. It's a broad sector, a big industry. 

Kinsey [00:03:54] So, when you're not tweeting about Drake or anything, [Kinsey and Ian laugh] you tweet a lot about fintech. You're the expert here in investments, in trends, in landscape, in general. So when we think about the different kinds of fintech companies, how do you describe the space in general? Is there a definition that you would give for what makes a fintech company a fintech company? 

Ian [00:04:15] Yeah, I think you hit on the head when you described it earlier as the nexus between finance and technology. Historically, I think startups have mainly been focused on the consumer side of things. So trying to replace a consumer's bank and make them a much more digitally native one. And that's been the case over the last couple of years, like you mentioned, I was a product manager at Acorns. There are a lot of other companies like Chime and Current and things like that that are out there that are tackling that space. 

Ian [00:04:46] But I think what a lot of new companies that have come up over the past couple of years have been more on the infrastructure side of things. I think a lot of entrepreneurs have focused on the consumer-facing side. And the people who have been at those companies have realized, oh, wow, there's a huge amount of problems on the underlying infrastructure behind financial services too. That's what's actually preventing the innovation from a from an industry level. It's not like banks can't create really cool apps. They can hire the same designers and the same product managers and engineers and make a really great mobile app. 

Ian [00:05:21] But the problem is that the legacy infrastructures aren't really built to support that kind of experience. So there's been a lot of VC funding in the infrastructure space.and I think in other areas of business banking. So PPP is directly related to that. I think a lot of that has really been focused on lending. But I think it's expanding more into banking services. So that'll be really interesting to see how that unfolds. But, yeah, it's a really wide area. Anything that kind of touches the intersection of the two is how I describe it. 

Kinsey [00:05:53] Yeah. And I want to also try to establish some of these big fundamental differences between fintech companies and traditional big banks, because we know, I mean, I can count no fewer than five people who I know in New York who work in some tech capacity at a big bank. It's not like these banks, you know, the Bank of America, the JPMorgan—it's not like they don't have tech teams. 

Ian [00:06:15] Right. 

Kinsey [00:06:15] They definitely do. But what makes a fintech different from someone who works in tech at one of these more traditional big banks? 

Ian [00:06:23] I think it's a really interesting question. I think it's really tough to answer because the lines are getting blurred really, really quickly. I think you can take a look at Goldman, for example. They have a Marcus brand, which is a 100% digital consumer product. They have no bank branches. They have a mobile app and they're adding more functionality to that. So the lines are definitely getting blurred. But the way I describe it, I think the two main distinctions are around regulation and I think capital as well. 

Ian [00:06:50] I think banks obviously are fully chartered banks. So they can, you know, for instance, deposits are FDIC insured. So they're insured by the government. You don't have to worry about losing money, things like that. Fintech companies don't have that same charter because it takes a lot of money and all the time to actually get that executed. So what they do is they partner with small banks in the middle of, like a small community bank, and store their deposits there. So that actually messes around with the economics a little bit around the margins, because they end up as a partner bank. 

Ian [00:07:24] You can get revenue by just being a partner and providing your infrastructure. So that's one big difference. And then I think another one is around just capital. I think startups have to raise venture capital. And banks traditionally have a lot of access to different capital, things like that. So when you're talking about a lending program or a lending company, I think that's where it gets tricky. If you're lending off of your balance sheet, like, in theory, a fintech company could do, that's a really risky loan versus like lending off of deposits like a bank, which is a really cost-efficient way to lend. 

Kinsey [00:08:03] Right. 

Ian [00:08:03] So I think those are some more differences between fintech startups and banks. I know I got really in the weeds there. [laughs]

Kinsey [00:08:10] No, I love it. I think that that was a great answer beyond just what I would say, which would be like, oh, I don't know, it's a different vibe. [laughs]

Ian [00:08:15] Yeah, yeah. 

Kinsey [00:08:17] Like capital and regulation are two really tangible ways of understanding how these two very different sectors are very different. So let's dive into one of those that I think is really, really interesting here that I personally have a lot of questions about. That's the regulation aspect of this. Who is in charge of regulating the fintech space? Is there an ultimate body that is supposed to oversee this entire sector? Like who's the parent in the room? 

Ian [00:08:44] That is a great question. The answer is very different based on where you're asking from. So, there is regional regulation. In the U.S., it's completely different, and I think a lot more archaic when it comes to regulation. There isn't a regulator. There's not like a fintech czar or a fintech regulator at all. The way that fintech has been traditionally regulated in the United States is that it has mainly been regulated by financial products. So it's not that the use of technology is being regulated, but it's what you're doing with that technology. 

Ian [00:09:20] What's the action that the user can take? Can they sign up for an account? Because that's an account creation product. Can they move money? Then it falls under the money movement regulation. So, for instance, a company like Venmo—and then the Venmo story actually gets into another area, which is regulation differs—some aspects of fintech are regulated state by state and some are federal. For instance, Venmo and money transmitter licenses. When you move money—when I send you money for drinks or something like that—on Venmo, you actually, in order to have that functionality, you need a money transmitter license. 

Ian [00:09:59] So the issue is that you can rent a license or you can apply for a license at 50 states. And when you're a small startup that raised like $1.5 million and have no compliancy, [indistinct], it's not easy to get a money transmitter license. I think the lack of regulatory clarity and I think the burden of regulation in fintech has been a really big barrier for innovation. I wish there was a really clear, like, oh, I could point to this person and they're like the head. But no, it's really a cluster in the U.S. 

Kinsey [00:10:36] I love how nebulous it is. I think that a super-gray answer like that and one that there isn't really a black-and-white, yes-or-no-type of an answer that either it's regulated or it's not, is exactly why I love talking [laughs] about fintech and — 

Ian [00:10:49] Yeah. 

Kinsey [00:10:49] And talking about these things. You bring up this Venmo example. I use Venmo almost every day, I would say. It's a very frequently used app for me. If I pull down on my phone, Venmo pops up. [laughs] We don't recognize all that goes into that and all of the regulatory headaches that are behind that. To us, it's just like a sexy user interface that makes things really easy or somehow solves for some pain point in our life. 

Kinsey [00:11:12] But, there's a lot more that goes into it. And I think that maybe if people understood a little bit more the regulatory landscape for a lot of these apps that they're using, whether it's something like Venmo to pay for drinks or something to save for your retirement or what have you, that maybe we would think twice before we pay rent on Venmo, [laughs] put our entire life savings in these accounts. 

Kinsey [00:11:32] So, I like that there is a big question mark still over the answer to that question. I do have to wonder, though, does trust ever become an issue for something in the fintech space? If these companies aren't making deals that are FDIC insured, is that in any way a detriment to building trust with consumers over the lifetime of that consumer using the product? 

Ian [00:11:58] Trust is super-important in financial services in terms of anything. When you think about the history of financial services, when you talk about, you know, thinking about revamping financial services, I think trust is a really core pillar. Now, when it comes to FDIC-insured accounts, there's no way you're going to be able to skirt those regulations; you just won't be able to launch. And fintech is turning into a very partnership-heavy industry, and your partners won't work with you if you're not properly regulated. 

Ian [00:12:32] So from a trust perspective, I think that's evolving very dramatically. Now it gets into when you lose that trust—that's really an issue, I think. You have companies like Robinhood, which have not only had issues more recently around just stability and reliability, which is, I think, really core when you're talking about wealth management. But also previously, they tried to roll out a checking account. And that put some issues around the regulation and things like that that my friend who works for me at Fintech Today, Julie VerHage, when she was at Bloomberg, she wrote all about it. 

Ian [00:13:06] It's a really interesting story. But they got hit pretty hard in terms of, like, in the press and I think in terms of regulatory scrutiny. And when it comes down to it, companies have an option when you're making a product. You can try to bypass the regulation and see if anyone catches it, which is not really worth it. It just works, like, spend the extra two weeks or four weeks, make sure it's all fully regulated, and then roll it out. 

Ian [00:13:33] The only issue that it does have is sometimes regulations can come up against the user experience and trying to create a really simple product. But I think those guardrails are really important as well to develop things like trust. 

Kinsey [00:13:45] So a lot of the startup landscape is about reducing friction, making pain points less painful for consumers. And it sounds like on the behalf of the creators of these apps, these founders, and the people who are operating within the space, there is a necessary amount of friction. That it should be a little bit hard to get regulatory approval, otherwise you shouldn't be putting the product out that you are putting out. 

Kinsey [00:14:09] You need to win the approval of certain regulators and to jump over certain specific hoops, because you need to. You need to make sure that you're putting something out that's usable and reliable, something that you can trust. On behalf of the people who are using these products, so I have to ask about friction as well. Do you ever think that maybe there is not enough friction for getting, say, like 15 neobank debit accounts? 

Kinsey [00:14:33] Is that something that someone who maybe is less sophisticated in this space could go out and do? is that, at any point, a concern for you in the fintech space? Maybe it's too easy that the requisite hoops are not being jumped through for the consumers. 

Ian [00:14:49] Yeah. That's a really great question. And I think it's really great in the context of something that's really been in the news about wealth management and just trading in general. It's something that we've been thinking a lot about a Fintech Today. I think in general, my—and this is a very evolving question, so my interest is based on like what I'm thinking now—so I think historically, I have tended to focus on reducing friction just because I mean, like as a product manager [indistinct] your job, right? 

Ian [00:15:19] Making things more frictionless, improving the experience, all that kind of stuff. But I do agree that in certain situations, that can have an adverse effect. And I think you're just seeing it play out now with, you know, commission-free trading. That's something that Robinhood really spearheaded. In theory, I fundamentally agree that people shouldn't pay a fee for just buying a share of a stock. That sounds absurd to me, if you think about it. 

Ian [00:15:47] The issue is that barrier also created a restriction around people who could afford to make those trades, also was very conscious about it because they're spending so much in fees. And it created a really interesting behavior. And that's been just like completely tossed out the window with everything going on now. I think the big thing that happened was obviously Robinhood is a product that has zero commissions, and when you want to trade stocks, that was one of the huge hooks that helped them grow. But also, more interestingly, earlier this year, pretty much every brokerage also dropped their fee structure. So companies like Schwab, Fidelity, E-Trade, they just all drop their commissions. 

Ian [00:16:29] And that just kind of opened the floodgates. And I think with COVID going on, people don't really have anything else to do besides, you know, check out the stock market. And now, 21-year-old kids are just like, you know, pouring massive amounts of money into the stock market. And the market— I think access to the market in a democracy is really important. But I think also making investors smarter is really important too. You can't really have one without the other. 

Ian [00:17:01] My job at Acorns was focused on financial literacy. So I'm a really big proponent of it and I'm really passionate about it. And I think that this is a really interesting time, where what you're realizing is that by dropping the commissions for a stock trading product, you also have a responsibility, in my opinion, to educate your user a little bit more too about what they're doing and the savviness of their trade. 

Ian [00:17:26] And, if I want to make a dumb trade, I should be able to. But also, it doesn't seem really fair to me that I'm unknowingly making a dumb trade, or like, I don't know enough. And there's not really an easy way for me to learn more about my investment. And I think that's a result of producing friction in a lot of ways. 

Kinsey [00:17:43] Right. Right. 

Ian [00:17:44] So I think that it's a spectrum. It's not like a binary on/off switch with friction. I think it might be more, like, when you reduce friction all the way to zero, it could have some adverse effects. But I think it's a behavioral thing that I think will be something to keep track of in the long term. I think we have a lot of examples of zero-friction products not being that great in retrospect. 

Kinsey [00:18:10] Yeah. Yeah, it's true. I'm all for democratizing finance and investing. And I think that that is a thing that needs to happen. And I'm very much pro democracy there. [Kinsey and Ian laugh] Like you say, to borrow your word—responsibility—there is a responsibility from these companies to make sure that along with all of this democratization and the everyman's finance app, that there should be education, There needs to be an education component for all of this. 

Kinsey [00:18:35] And maybe that's just because it's two of us—two, like, content creators talking about it. [Kinsey and Ian laugh] But financial literacy is so important. And it's something that I think is an evolution. It's going to get better, hopefully, as we continue to see these products go to market. But at a certain point—I feel like I've said friction a million times already [Kinsey and Ian laugh]—but we need a little bit. [laughs] It's good for us. 

Ian [00:18:56] Yeah. 

Kinsey [00:18:58] OK. So now that we understand a little bit better what makes a fintech a fintech, let's talk about why these fintech companies are playing a bigger role in this conversation that we're having about economic justice. But first, we're going to take a short break to hear from our sponsor. —

Kinsey [00:19:15] And now back to the conversation with Ian Kar. Ian, like I was saying at the top of this episode, a big part of why some small and minority-owned businesses didn't get PPP funding was basically because they didn't have a relationship with the big banks that were giving out loans. So I've got a couple of questions. First of all, do you think on the whole, that the traditional banking sector has failed small businesses in the last six months? 

Ian [00:19:40] Oh, 100%. Last six months or in general? Because I think the answer is somewhat different. In general, I think 100%. In the last six months, I think definitely, but not as much as people say. I do want to take the opportunity to zoom out a little bit because I think one thing that's been missed in a lot of the whole fintech and big bank stuff and the relationship with PPP is that traditionally, banks haven't really served small businesses. There's a reason that Square and OnDeck Capital and Shopify and these big companies have been developing and been thriving off developing banking-related products for small businesses. 

Ian [00:20:18] It's because big banks traditionally haven't served that demographic. They found it really complicated. They found it really expensive to market to that audience. So I think historically, big banks haven't really done a good job. And so I think one of the really interesting things that's happened with COVID is that small business owners are the ones that have been affected the most. And fintech companies have been in a really interesting position to help that demographic. Not only have they spent, like, the last 10-ish years acquiring that customer, learning everything about it, but they also had the operations and the processes and the infrastructure built out to kind of serve that audience. 

Ian [00:20:57] So I think that's kind of why this whole situation with COVID and PPP was very unique, and put fintech companies in a really unique position to really make a dramatic impact in their customers lives. 

Kinsey [00:21:13] Right. This whole aspect of acceleration that COVID has brought to light in the business world is huge. Banks have never been able to make a ton of money off of lending to small businesses. The case was the same 10 years ago as it is today. Those loans just aren't as profitable for the big banks. 

Ian [00:21:31] Yeah. 

Kinsey [00:21:31] And also, these fintech companies have tried to insert themselves in the process at the exact right place to foster these relationships, to make sure that they can market to smaller businesses that big banks are sort of leaving out to dry. And I think that maybe we haven't paid enough attention to this part of the conversation in terms of small business health in the United States in recent years. But having lived through this PPP conversation, we're now paying a lot more attention to it. We're putting it under the microscope. We're thinking about that stat at the top—that 12% of these minority-owned businesses got what they wanted is not good. [laughs]. 

Ian [00:22:04] Yeah. 

Kinsey [00:22:04] I think oftentimes we are pinning blame on these big banks, but this is not a new problem for us to pass judgment on. This has been happening. So, when we think about the last four or five months of acceleration of these themes and trends that have already been at play in the finance sector, both on behalf of fintech and the big banks, what's the context for understanding how this acceleration has happened? What do we need to know to best understand the way that fintechs are stepping in—or maybe not—to help small businesses right now? 

Ian [00:22:40] I think fintech companies have really played a big role around specifically the aspect of loan disbursement and actually getting money into the hands of the people. There are only a couple fintech companies that have been approved as nonbank lenders by the SBA. They're like the PayPal, the Squares of the world. But most of the companies have basically figured out partnerships to enable their customers to have access to PPP loans. 

Ian [00:23:11] So how this works is a company—let's take Divvy and Cross River Bank, for example—Divvy is a business banking credit card startup. They offered a really seamless way of applying for a PPP loan and having it approved by a partner bank, which was Cross River Bank. Because they had—and this goes back to an interesting point you were talking about earlier—the reason that banks focused on customers that they already had a previous relationship with, whether it was a checking account or line of credit, is because when you're doing loans like this, the key here is the underwriting process and how much data can really provide a unique insight into the risk that a specific loan has. 

Ian [00:23:57] So the issue is that big banks traditionally don't have that data around small businesses. Over the last 10 years or so, companies like Square have really focused on capturing that data by doing payment processing and things like that. A reason that a company like Square has a really thriving lending division is because they not only see how much a merchant's making, but they also have insight into how much you're spending and things like that. So they have all this great data that they can leverage to power loans off of. 

Ian [00:24:25] Banks don't have that data because small businesses don't really shop, you know, use their products. So without that information, the PPP application process was also really convoluted as well. Not only has the application changed plenty of times, but you need to have employment verification, income verification. A lot of different checks and balances have been introduced into the process. So they just really couldn't fill out the information. Yes, they could, in theory, they could probably receive that many applications and fund those. 

Ian [00:24:59] But also on top of all this, people were working remotely, and banks have never historically worked remotely or done loan issuing remotely. So the amalgamation of all these massively different shifts created a lot of issues for banks, where I think fintech companies were able to step in and say, hey, we can provide data via API. So you can just plug into this API and get, you know, data from our customers, for instance. Or develop the back-end relationship with a existing bank that has a SBA relationship so that the customer doesn't have to do any more work. You handle a lot of it for them. 

Ian [00:25:38] And I think what the real impact was, in my opinion, it really made the process a lot simpler and made and made PPP loans a lot more accessible for people who probably wouldn't have got them otherwise. Because the fact of the matter is, it was so complex and so difficult to understand that it was probably not worth the headache for a lot of people. 

Kinsey [00:26:03] Yeah. That makes a lot of sense. And I think that there are a couple of ways to think about this. That there are the fintech players who did get SBA approval to be nonbank lenders. And then there are the fintech players that stepped in to help with more traditional avenues of capital. Correct? 

Ian [00:26:21] Yeah. So the way I think about it is like this. There's almost two groups. There's, like you said, SBA lenders who are able to directly lend to their merchants. And then the ones that had to partner with a financial team to do it. 

Kinsey [00:26:39] Which of those do you think was more difficult? Partnering with a financial institution or getting the approval? 

Ian [00:26:45] There are different kinds of difficult. They're both really, really challenging. For instance, I think becoming an SBA-approved lender—I think Dan Schulman, the CEO of PayPal, said this on the record. But something accelerated their government relations aspect like 10 years or something like that, because now, traditionally SBA lenders are groups that have charters. So now, if you're thinking about the impacts of COVID long term, if I'm a Square, I should be able to say, listen, give me a national charter, or a PayPal, give me a national charter, like, I'm a SBA-approved lender from the PPP crisis. 

Ian [00:27:24] And I now have a track record to show that I can keep up with big banks and financial institutions. I also deserve the same regulatory [indistinct] and access to Federal Reserve capital and, you know, a bunch of different benefits that banks get that fintech companies don't. So —

Kinsey [00:27:41] Interesting. So you think that—could that meaningfully change the way that we talk about financial institutions in, say, five years? 

Ian [00:27:48] I think so. I think it depends on a lot of different moving pieces. I think if people—it's an interesting loophole that's kind of available now. It's only if people want to exploit it, if that makes sense. But being a SBA lender isn't really that easy, either. So we might see more fintech companies trying to become SBA lenders as well. I don't really see that happening, but I think this is an interesting sort of watershed moment for the fintech industry. So that approval from the SBA was super-important for the PayPals and the Squares of the world. 

Ian [00:28:20] But on the opposite side of the thing, the partnerships were also really complex because you're scrambling together a bank partnership, which takes probably years' worth of vendor diligence to actually get executed. And you're cramming that into, like, three weeks. 

Kinsey [00:28:33] Yeah. 

Ian [00:28:33] So, you're getting all operations stuff together. You're making sure everything's compliant and regulated on top of all this, so like data sharing and things like that. You're getting the user experience right. Just like, as a [indistinct], just thinking about that process gives me the shivers a little bit, just because, like, [Kinsey laughs] it sounds like nonstop working for three weeks and a bunch of my friends who were doing it—that's basically what their lives was. 

Kinsey [00:28:58] So Ian, a lot of what we've been talking about these last couple of minutes is about acceleration of trends and how there are going to be these new disruptors stepping into the space to make things like, say, loan forgiveness a lot more seamless for traditional financial institutions. Let's take the zoom-out view of the fintech space right now. What beyond just producing pain points for this new normal of working remotely and not getting within [laughs] six feet of each other—what else has been a big trend or theme that you've seen play out in the fintech space in the last couple of months? What has been kind of laid to bear in this COVID era for fintech? 

Ian [00:29:36] I think it's becoming very—it's gonna be a really interesting time. I think there's a lot of macro-economic issues about PPP and COVID that are going to have a lot of impact into fintech. I think one of the weirdest hypotheses that I have is that the whole COVID situation may be really good for consumer fintech companies. Which traditionally has not been—for the past couple years, people in fintech have always been saying, like, what happens when we're in a down economy? 

Ian [00:30:09] Things like lending. Like all that stuff goes haywire. Can these fintech companies survive? They're not only surviving, they're thriving. So I wonder if it's like if a lot of folks were wrong about their theses around down economies and maybe these businesses are more countercyclical than we expected. 

Kinsey [00:30:26] Yeah. And that this is a necessary stress test. It's actually proving the upside. 

Ian [00:30:30] Yeah. Yeah. 

Kinsey [00:30:32] Not [laughs] not adding more friction. 

Ian [00:30:34] Yeah. 

Kinsey [00:30:34] Let me say friction one more time. 

Ian [00:30:35] Yeah. Let's just try to sneak it in more. [Kinsey laughs] We should have like a drinking game around it. We should, we should — 

Kinsey [00:30:39] I know. We really should. 

Ian [00:30:40] We should encourage the audience — 

Kinsey [00:30:40] Anybody who's listening: [laughs] go back. Start from minute zero. Start again. Every time we say friction, you take a sip. I don't think you'll remember this transition that I'm about to make [Kinsey and Ian laugh]. So, Ian, we've talked a lot about what's coming up in the future of fintech. And I think that there are a lot of factors that I frankly, personally, didn't take into account when thinking about this conversation. 

Kinsey [00:31:03] This is more than just the PPP thing. I think this is a great pairing with our first episode on PPP earlier in the week. But to me, this just opens up an entire, [laughs] like another Pandora's Box of questions about what comes next and what the relationships between government and financial institutions and fintech startups look like. And I think it's all changing a lot. So, I'm excited to follow Fintech Today and to follow your work and see how you guys cover it. I love any chance to catch up with you. And this was great. So thank you for coming on Business Casual. 

Ian [00:31:35] Of course. Anytime you want to talk about fintech, just give me a call. Happy to chat. 

Kinsey [00:31:39] OK. [laughs] OK.

Ian [00:31:40] Talk to you later. 

Kinsey [00:31:48] Thank you so much for listening to this episode of Business Casual. Not sure if you've noticed, but we've actually been testing out a new format on the show. It goes like this: On Tuesday, we publish a major interview about some big-picture topic. And then on Thursday, we put out a discussion to further break down that big topic into more digestible pieces. I want to know what your thoughts are on this new format. If you like it, if you don't like it, anything. Send me any feedback to kinsey@morningbrew.com. That's k i n s e y@morningbrew.com and share your thoughts. All right. See you guys next time. [sound of a ding]