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Phin Upham speaks about Investment in financial technology

June 4, 2015 by · Leave a Comment 

By Phin Upham

The hot topic at the recent Milken Institute Global Conference was the concept of financial technology, or FinTech. One of the major takeaways from the global financial crisis is the idea that the bottom portion of the American population is not being well served by financial institutions.

How Big Banks Lost Touch

One of the arguments that Phin Upham presents against the traditional banking model is “paying to store” money. Most in the middle or upper class find this concept foreign, but these customers aren’t the ones dealing with overdraft fees. Overdraft fees act as a form of interest, as do account maintenance fees and anything else levied against customers.

Millenials are the biggest group speaking out and taking action against these fees. Big banks are adapting, but they admit that regulation has hampered innovation. Regulation can help protect consumers from some dangers, but as the 2007 crisis taught us there is no contingency plan for every potentiality.

The Future

Phin Upham predicts that the interaction between banks and consumers will change dramatically within the next three years. New methods of delivering consumer financial data accurately will help those at the bottom better manage their money. Short term loans that carry a smaller risk to individual lenders with wealth will also contribute to growing the middle class.

There is tremendous opportunity for crowdfunding as well. Making investment and banking more accessible is a big part of the future of FinTech.

About the Author: Phin Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Phin Upham website or Twitter page.