By Chip Harden
As the United States copes with shrinking GDP numbers and rapidly ballooning unemployment amidst the COVID-19 pandemic, there are decidedly few sectors not suffering considerably from the demand and supply shock this current environment has precipitated.
Interestingly, financial services, and more specifically Fintech, has been less severely impacted by the adverse economic climate. As the need for basic financial services become more acute, we are witnessing an all-hands-on-deck phenomenon where incumbent and startup/growth stage firms alike are stepping up to bridge American businesses and consumers. Banks and credit unions have admirably done their part to process the deluge of loan applications the Paycheck Protection Program has spurred, from community banks to global top ten names.
Square, a FinTech leader that has quietly built up a meaningful Atlanta presence, continues to prove its proficiency in financial services outside of payments by gaining approval from the SBA to provide loans via Square Capital. Other prominent Georgia players have been active- Fiserv will be providing prepaid cards to stimulus fund recipients who lack checking accounts, and FIS launched a corporate venture division with plans to invest $150 million in growth-stage FinTechs . This recent Crunchbase article offers additional positive signs.
TAG FinTech’s virtual panel last Friday featuring Alogent, Atlantic Capital Bank, Greenlight Financial and Truist provided further detail. Greenlight COO Johnson Cook shared the encouraging news that not only is his firm continuing to hire, but its biggest onboarding challenge has been getting networked laptops into the hands of new remote team members.
It’s inspiring to see financial services play an invaluable role in what will be a gradual but (hopefully) steady road to economic recovery. Whereas financial services drew the ire of public opinion during the ’08 crisis, today it serves as a beacon of hope. Well capitalized banks and FinTechs possessing the requisite technology needed to support consumers and businesses alike in this remote-only climate are indeed inspiring as a clear path forward. It will be particularly interesting to see the ways in which these groups can work together to make our economic recovery a reality.
Chip Harden is the Southeast Region Manager for Ondot Systems, and serves on the TAG FinTech board.