Financial executives are looking at how to save people from themselves and the lending institutions that often, not always, prey on them.
A panel at Benzinga's Fintech Deal Day talked about the all too common issue of cash-strapped individuals including freelance workers who end up getting in over their heads and become vulnerable to quick loans that push them over the edge.
The panel, hosted by Citizens Pay's Christine Roberts discussed partnerships between fintech companies and established financial institutions and how these partnerships can foster economic empowerment and help people build credit rather than stack up bad credit.
"Banks provide compliance, the boring stuff - but things that keep fintech out of trouble," she said, adding that smaller and nimbler fintech can provide growth and innovation. She also pointed out how some firms like SoFi
Financial Literacy Is Key
Mastercard's
Haymond articulated the fintech's ability to help build credit.
"It used to be a world where the only option was to get a credit card. Now there are so many other options," she said, referring to building credit through products by giving asset-covered small loans with short payment periods and without high fees.
These options extend even to small businesses, with firms like Lendio offering access to the credit market in exchange for data-sharing consent.
Clearing House's VP Cheryl Gurz said that fintech trends added a lot of value to the gig economy.
"The way the economy has been in the last couple of years, many people are taking on more and more contract work," she said, explaining how some gig workers cash out their earnings multiple times per day to cover the daily expenses of running their gigs.
By giving these cash-strained individuals instant access to their earnings, fintech companies are enabling them to work and earn more.
Ed Zaval, Daily Pay's CCO is also focused on tackling the issues that plague the most vulnerable members of the society.
"Fundamentally solving predatory lending is our mission," he said, adding that DailyPay provides critical liquidity to workers with two out of three options without any fees.
Zaval also shared an inspiring message for all the fintech entrepreneurs out there, giving advice on how to find motivation to continue working on their products.
"If you work for a business that makes its way to a user or consumer, sit on their customer service help desk calls. Listen to those calls. They are so powerful, and sometimes they share more information than they need to help you solve the problem, but their needs are acute. Being able to solve for them is really gratifying."
