Personal Finance News & Trends (9.16.20)

Bi-weekly updates on personal finance, fintech, US economy and more

Source: Wikimedia Commons

US Economy

Paychecks instead of gov-checks

Good unemployment figures dissolve hopes for additional government checks

US unemployment rate fell from 10.2% to 8.4% in August, after the economy added 1.4 million jobs (mostly due to businesses reopening and hiring back workers they let go).

Source: Statista

While this is a positive sign of recovery, it’s bad news for the proponents of additional stimulus plans. The hopes for another round of checks-in-the-mail faded last week.

Mom! Dad! I’m home!

Young people are moving back to their parents’ homes

Despite the housing boom (or should I say bubble?), more and more millennnials and gen zers are leaving their homes and moving back in with their parents.

A majority of young adults (52%) lived with one or both of their parents in July, up from 47% in February.

The reason, of course, is the economic slowdown.

Personal Finance Updates

Hey big saver!

Americans are big on saving and banks can cash in on the situation

Americans are setting aside almost 18% of their incomes for saving, on average, according to the Bureau of Economic Analysis.

According to a recent Gallup poll, 76% of Americans plan to funnel their excess funds to saving plans, rather than spending them.

This correlates with the decline in credit card debt for the first time since 2014 (as we mentioned in our prior reports).

79% of the savers will keep their funds in a bank (hint hint to our OB vertical).

$1T and counting

The mortgage industry has set yet another record

US lenders issued $1.1T in home loans between in Q2 — a 20-year record — thanks to the low-interest environment. According to Fannie Mae the annual volume may reach $3.9T — an all time high.

Mortgage refinancing volumes for Q3 are expected to be 20% higher than those of Q2.

Meanwhile, mortgage delinquencies rise 450% from pre-pandemic levels.

Corporate and Partners News

Rise app and play!

Fintechs are doubling down on developing apps and even computer games

Consumers use more apps to handle their finances and do so more frequently, according to a latest report published by Plaid.

Source: Plaid

Financial services companies react accordingly. Goldman Sachs, for instance, released a comprehensive financial management app that will serve the users of their online bank Marcus.

Next, it plans to add an investing service to battle fintechs like Robinhood, Square and others.

Some companies are willing to take it up a notch and to gamify the user experience to help them engage with younger audience.

Here’s an example of an older version of Texas Trust Credit Union’s “Game of Loans”:

If you can’t beat them — buy them

Jiko became the first fintech to acquire a national bank

Last month we reported on Varo being the first fintech to receive a US banking charter. Well, now there’s another first. Online bank Jiko acquired Mid-Central Federal Savings Bank and became the first fintech to buy a national bank.

“We’ve built a perfect place for innovation to breed,” says Lintner. “We’ve got the technology, we’ve got the team, and now we’ve got the licenses.” Stephane Lintner - CEO & Co-Founder

We can expect more fintechs to try to get banking charters, either Varo-way or Jiko-way.

Head of Content @Natural Intelligence | Fintech specialist | Passionate about fintech, insuretech, banking, blockchain, new technologies and politics