Weekly Briefing #02

What happens in Iceland, shouldn’t stay in Iceland. Last week, one of Iceland’s most promising fintech companies, Meniga, made news as it was chosen by Business Insider as one of the most promising Nordic fintech start-ups. We hadn’t heard about Meniga previously, but this company, which arose from the turbulence of Iceland’s financial crisis, now has our attention as it’s gaining impressive traction with global banks. Check out this hot Icelandic company here.

The sharing economy needs a Motion Pictures Association. Zak Stone’s moving AirBnB takedown piece about his father’s death in an Airbnb rental confronts important questions about its obligations to users of its platform: “Airbnb is willing to send someone to make sure your trees look beautiful in their photos, but won’t deal with whether or not those trees will fall on your head.” Trust, safety and liability issues are not just an Airbnb issue, though. Companies who are threatened by an Airbnb style challenge are sure to step-up their attacks as the sharing economy platforms increase their market share over time. Sharing economy companies — especially the large players — would be wise to voluntarily adjust their business models before regulators do it for them. They should look to the film industry and its effective use of the MPA to dampen externally imposed film standards as a model.
Big consumer banks still don’t get it. In this Bloomberg article, representatives from the big banks have demonstrated that they have still not learned why Millennials are leaving them in droves. A Bank of America spokesperson, for example, was quoted as saying that the bank’s strategy is to move away from “gotcha fees”. In doing so, the statement confirms that the bank’s previous strategy featured “gotcha fees”. The problem is that even if larger banks copy the mantra of straightforward pricing that is emblematic of many consumer-facing start-ups, it still feels like a strategy du jour as opposed to an enduring commitment to care about the customer. In order to win back the trust of younger consumers, big banks will need to do more than keep even with the disrupters because the big banks are starting at a point below zero.

Amazingly, Sony still sells Betamax videos cassettes. If you don’t believe us, see this article which has given rise to an in-house conversation on financial services and future Betamax-like headlines. Here are a few goodbye headlines that we’d like and/or expect to see in five years :
1) Bloomberg says goodbye to terminals
2) Fidelity and Schwab say goodbye to charging commissions on stock trades
3) Banks say goodbye to sneaky ATM surcharges and fees

The rise of the “1099 Nation.” Despite ranting from politicians and some unions, the rise of the freelance workforce is here to stay in our view. That’s why we were pleased to discover this piece from Core Innovation Capital, which sites research predicting that 40% of the entire U.S. labor market could be comprised of 1099 wage earners in five years. If this prediction proves accurate, the implications for society at large will be quite significant. Moreover, the real challenges facing 1099 earners in trying to access mainstream financial services (e.g, obtaining credit, saving for retirement, buying insurance) have barely been broached by mainstream financial services providers. Core Innovation Capital provides a list of some of the promising companies focused on addressing this huge void.

Three Random Data Points: Iceland

• Sheep outnumber people by almost 2 to 1
• Beer was not legalized until 1989
• The current first lady of Iceland is from Israel

Originally published at www.thefinancialrevolutionist.com on November 13, 2015.