Why a Biden win could be good for fintech

BankingDive | Anna Hrushka | Nov 5, 2020

bidenn 300x177 - Why a Biden win could be good for fintech As the impact of the coronavirus pandemic threatens to increase the number of unbanked households in the country, the push for alternative banking solutions could get a boost under a Joe Biden presidency — and that's a good sign for fintechs, some experts said.

"I do think we're going to see pressures from the Biden side for allowing more alternatives to traditional banking," David Schultz, a Hamline University political science professor, said, in the event the former vice president wins the election.

 

See: What to expect from Biden-Harris on tech policy, platform regulation, and China

The Democratic Party has long backed initiatives focused on financial inclusion, including calls to reestablish postal banking and create public banks. Financial inclusion is also a mission often touted by most fintechs.

With that in mind, a potential Biden presidency could usher in fintech's "golden years," Kara Ward, a Holland & Knight partner, said last month during a webinar.

While the number of banked households in the U.S. has trended upward in recent years, the impact of the coronavirus could likely reverse that trend, according to a recent report by the Federal Deposit Insurance Corp. (FDIC).

"[F]indings from multiple years of the survey suggest that the unbanked rate is likely to rise as the unemployment rate rose from its level prior to the pandemic," FDIC Chairman Jelena McWilliams said in a speech last month.

See: BDC: What the U.S. election means for Canadian entrepreneurs

Fintechs such as challenger banks and peer-to-peer payments companies often tout their nontraditional methods of providing financial services that often come with fee-free accounts and alternative methods for checking credit.

 

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