Hey everyone! Thanks for tuning into this week’s newsletter. We’re sharing a couple of Reconcile updates as well as some great fintech finds from this past week!
Quick Reconcile updates:
We got accepted into Afore Capital’s Zero to 1 Bootcamp! A huge thank you to all of you who’ve given us enough feedback and traction to get us into this program.
We’re putting together a power user tester community group. Our ask is for you to chat twice a month, and in return, we’ll let you try out our latest features, shape our product roadmap, and gift you a new book every month (selfishly doing this so we can also form a book club 🙃)! FYI, this week we’re testing our auto-bill monitoring and voice library designs. Like this post or reply to this email saying, “Sign me up” and I’ll add you to our list!
Great fintech find #1: Keys to a sustainable lending model
Ayo Omojola is hands-down, one of the best fintech writers. You should definitely check out his full list of essays from the year here. Most recently, he wrote about the keys to a sustainable lending model. I’ll highlight his main point below, but you should 100% read it in entirety (will take you about ten minutes).
To build a lending business that is differentiated and sustainable, you need at least 3 of 4 things: pre-income servicing: a way for the lender to get paid synchronously with, or before the borrower; proprietary data that others don’t have; lower cost of borrower acquisition than competitors lending to that same borrower; Lower cost of capital than competitors lending to that same borrower.
Ayo’s take hit on one of the key trends that we’ve spoken about in previous newsletters around embedded fintech (more on embedded fintech if you’re not familiar) regarding lowering the cost of borrower acquisition. If you work in the fintech lending space or want to move into it, you’ve got to read Ayo’s piece!
Great fintech find #2: What’s inside your (mobile) bank?
In this month’s Andreessen Horowitz newsletter, Angela Strange talks about the rise of mobile banking in the last few months. Interestingly, the megabanks overwhelming opened more new accounts than challenger banks did. You can see the 51% to 18% margin that megabanks won by.
Megabanks aren’t well-known for their mobile banking experiences, hence why Reconcile was started (*cough*). Angela makes the case that banks are generally reliant on third-party tech vendors whose products plug into mobile banking apps. However, she notes that banks should move away from relying on one vendor and instead choose from best-of-breed providers (aka Open Banking).
I agreed with mostly everything Angela said. She ended her post by saying, “even post-pandemic, we will be able to accomplish all of our banking needs by just using our thumbs.” It makes more sense to envision a future in which we accomplish all of our banking needs by just using our voice, at least to me.
Thanks for reading!
Jaimin Desai - CEO & Co-Founder of Reconcile
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