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New Tech-Based Financial Services Begin to Offer an Alternative to Big Banking Practices

Published on Nov 30, 2010


Read 'New Tech-Based Financial Services Begin to Offer an Alternative to Big Banking Practices' at 'Time to Start Up,' the small business blog by BizFilings.
Banks have drastically tightened their lending policies and the wake of the recession has brought with it a degree of public mistrust toward large banks, which hold more than 40 percent of the nation's deposits. But the arrival of new technologies such as smartphones, tablet computers and mobile payment systems are beginning to deliver financial services that return trust and comfort to consumers - many of whom are small business owners and entrepreneurs in need of financial breaks. One such service, Venmo, allows friends, relatives or business partners to transfer funds between their phones without bank authorization. The service is ideal for quick business transactions such as retail purchases or paying for business lunches. But for more bank-related stand-in services, BankSimple runs on the motto: "We're not a bank. We're better." They offer customers simple interfaces and banking opportunities while leaving compliance and treasury issues to company affiliates. "What I find fascinating is that these organizations are attacking the established system of financial transactions and creating new trust networks that have the potential to revolutionize our markets and our commerce," writes John Gerzema for Inc. magazine. "They could dis-aggregate the financial system."