The hidden world behind your new "banking" app
Planet Money
Fintechs Can Empower, But Are Not Banks
Fintech companies offer significant benefits for the unbanked and underbanked populations by providing accessible savings solutions. While fintechs like Yotta present themselves as innovative banking alternatives, they are not banks. This distinction is crucial as consumers may overlook that these services, despite their banking-like functionalities, do not provide the full spectrum of traditional banking services such as holding deposits, making loans, and facilitating payments. Actual banks must adhere to strict regulatory requirements and maintain reserves, which is not the case for fintechs, leading to potential misconceptions among customers.
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