Millions of Americans now find their bank branches closed and their paychecks gone. A new generation of VCs is looking to back financial technology startups that help

The coronavirus pandemic and the associated ongoing business shutdowns in the US have highlighted just how precarious many Americans’ finances are. In some instances, the current economic environment has only deepened American income inequality by exacerbating existing financial challenges and uncertainty for various groups.

But some Silicon Valley investors believe there’s no time like the present to address these issues head on, and in some cases to build entirely new solutions for problems that rose to the forefront in just the last 6 months. 

Business Insider asked 25 rising star venture investors what opportunities lie ahead for the fintech industry as the US and other countries grapple with widespread economic uncertainty and income inequality following the coronavirus pandemic. However, many investors pointed out that income inequality and access to existing financial services was already a struggle for marginalized groups – the pandemic just made those struggles more evident.

“Even prior to COVID-19, nearly 70% of Americans were struggling with some facets of financial health, such as spending, saving, borrowing, or planning,” Flourish Ventures associate Sarah Morgenstern said. “These challenges are especially pronounced amongst communities of color, and have been significantly exacerbated by the current economic downturn.”

 Investors said that certain trends in fintech, such as contactless payments and mobile banking, accelerated substantially due to the pandemic after many stores adopted new systems to provide safer ways to pay, while banks shuttered physical branches. Those shifts helped give marginalized communities access to financial services that weren’t available to them before, and they could brighten an otherwise dire financial outlook.

“One of the scariest problems is that 25% of Americans are unbanked or underbanked,” Tusk Ventures Partners principal Solomon Hailu said. “Those are people who either don’t have a bank account, or have an account, but still use financial services outside the banking system like payday loans to make ends meet. With the current state of the economy, I’m hoping for a resurgence of innovative peer-to-peer lending models to displace the predatory and antiquated payday lending industry.”

To Hailu’s point, many investors are naturally on the hunt for startups addressing these problems head on. In addition to creating services for financially strapped communities, investors said one of the largest market opportunities lies with young Generation Z consumers, many of whom are turning to freelancing or taking gap years in lieu of secondary education during such a volatile time.

“2020 has presented seismic shifts to both society and our underlying economy,” Obvious Ventures senior associate Meera Clark told Business Insider. “Coming out of The Great Lockdown, the employment landscape will likely look much different, with some exploring freelance opportunities for the first time while others fight for the lives of their beleaguered small businesses. While different in their day to day struggles, what these parties share is a need for innovative liquidity and financing solutions.”

Investors pointed to competitor banks like Chime, income-share models like Lambda School, and investing apps like Robinhood as examples of how technology could better serve varied sets of customers without breaking the bank, so to speak. Making investing more accessible, for example, could help users build wealth in ways that have historically only been available to the wealthy and well-educated. 

“Historically, financial services are most available to those who least need it,” Greylock principal Seth Rosenberg said. “If done correctly, that system accelerates prosperity, rather than concentrating power or extracting onerous fees. With software, people should be able to access credit, create and grow wealth, and spend and transfer money seamlessly, with no middlemen extracting fees or overlaying bias.”

In the United States, financial security is largely based on arbitrary measures of creditworthiness, investors said, so giving more people access to those building blocks of financial security should be the top priority coming out of the ongoing shutdowns. That’s in addition to shoring up financial support from the federal government and giving Americans easy-to-use tools to replenish depleted savings while making ends meet, investors said.

“Having a degree of fluency and comfort around finance goes a really long way because so much of finance is not designed to welcome in participants who haven’t been inducted into it through family, friends, or formal study,” Slow Ventures investors Jill Carlson said. “I think redesigning financial tools so that they are more inclusive and accessible can go a really long way to addressing inequities -– whether those tools are about saving or investing.”

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