Earlier this week, Apple unveiled a new high-yield savings account in partnership with Goldman Sachs. The arrangement’s underpinnings point to a development in fintech land that can’t be ignored: Tech giants leveraging legacy financial institutions to offer new age financial services to their existing users. In the process, customer acquisition costs are kept to a minimum. This dynamic creates a scenario that will make it that much harder for what has been a bonanza of fintech start-ups to flourish.
Their names became familiar in many households during the pandemic: Robinhood, Venmo, and Affirm. Zoom in a bit more and companies like Stripe and Plaid have become well known by millions of small business owners. According to estimates, fintech start-ups raised more than $130 billion in 2021 with 100 companies having attained a $1+ billion valuation. Those are shocking totals that have since taken a major beating.
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