Motley Fool Money The War on Checks
Oct 17, 2022
Joining the discussion are Jason Moser, a Senior Analyst at Motley Fool with keen insights on banking, and Asit Sharma, also a Senior Analyst with a focus on advertising technology. They tackle the impact of rising interest rates on banks, revealing how Bank of America is thriving even as home buyers struggle. The duo also delves into the resilience of advertising spending amid economic pressures, highlighting innovative players in ad tech and the evolving landscape of connected TV advertising.
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Interest Rates and Bank Profits
- Rising interest rates benefit banks by increasing net interest income, the difference between interest earned and paid.
- This is evident in the increased net interest income of banks like Bank of America, JPMorgan, and Wells Fargo.
Banks Prepare for Potential Downturn
- Despite strong consumer spending, banks are increasing loan loss reserves, anticipating potential economic challenges.
- This suggests banks foresee difficulties like loan defaults and bankruptcies.
The Decline of Checks
- Zelle transactions surpassing checks signals a decline in check usage.
- FinTech companies like PayPal, Block, Visa, Mastercard, Marqeta, and Bill.com stand to benefit.