Andreessen Horowitz Report “Charting the COVID Effect on Fintech”. “What’s trending in lending, trading, banking, and beyond, according to consumer online behavior.” By Anish Acharya, Seema Amble, Rex Salisbury, Matthieu Hafemeister, and Lauren Murrow.
Graphic Source adweek.com
In a collaboration with Glimpse-“a software company that culls millions of online signals to identify surging trends”, a16z-a firm “accustomed to closely tracking engagement, retention, and financial metrics to measure growth”, created this report about trends happening in the wake of COVID. See Andreesen Horowitz for a PDF of the full report.
Summary of Article
Trends noted from online signals in Liquidity and lending: “We’re saving more and paying down debt-for now.”
Indicators trending up;
Cash Out Refinance
Home Equity Lines of Credit
Vehicle Loans-Full size pickups are most popular.
Buy Used Car-sales dipped to lowest level in years but has rebounded to a level not seen since before 2016.
Online Loan
Those with good credit and still working have benefited from lower rates and are borrowing more. Those less fortunate faced higher rates and few approvals. Surprisingly, seems that those with stimulus or other money have actually been paying down debt a trend that can end requiring borrowers to pay or banks to charge-off-something anticipated but hasn’t materialized yet.
Trends noted from online signals in Trading: “We’re easing into the stock market, for better or worse.”
Indicators trending up;
Brokerage Account
Airline Stocks-big peak then crash
Cruise Stocks-big peak then crash
Options Trading
Pattern Day Trader-peak then fall
Fractional Shares
eSport Stocks
2020 has brought plenty of market volatility. “Trading platforms such as Robinhood, Stash and others are making a play for young and first-time traders with commission-free, mobile-first, easy to use products.” The big brokerage houses have followed with fractional shares and commission free trades. With the ups and downs investors are more frequently checking on the performance of their accounts and trading more including day trading. With sporting events and casinos closed “trading options became the closest ... to gambling.” eSports have filled gaps left by all the closing of schools, business and “most sporting arenas.”
Trends noted from online signals in Small Business; “We’re exploring out options with side-gigs and supplemental income.”
Indicators trending up;
Business Bank Account-those having lost jobs attempt to start businesses and some need an additional account specifically for tracking stimulus money.
Dropshipping-“allows [small businesses] to sell a product directly from the manufacturer without needing to bear the cost and maintenance of storing inventory.”
Free Certifications-boost your career potential with online training.
Trends noted from online signals in Consumer banking: “We’re expecting more from our financial institutions”
Indicators trending up;
High Yield Savings Accounts-rates are so low so there’s more searching for the best offer.
Venmo Card-rise in online banking, the digitization of finance, and social interaction
Cash App-filling the need for “short term liquidity, like overdraft accounts and paycheck advances.”
Varo Bank-same rationale as Cash App
Greenlight Card-“a prepaid debit card that enables kids (and their parents) to track spending and incentivizes them to save.
Credit Builder Card-works like a debit card and allows newbies to create a credit history
Joint Account-traditional banks require both in a joint application to appear in person-new companies are finding other ways to ease obtaining a joint account.
Other Trends noted from online signals:
Indicators trending up;
Used Golf Balls-golf is recognized as a doable way to exercise and socially-engage in the COVID era. New devotees look for inexpensive or used equipment to start.
Lowes Return Policy-home improvement increased with COVID but some have overspent and look to return excess items.
Furniture-work and school at home calls for platforms that help make it easy
Rent Appliances
Pool Financing-public pools closed or a concern.
Boat Loan-another recreational option that has social distancing
RV Loan-hit the road when there are concerns about COVID transmission on planes.