The winter holidays are approaching…
Which means it’s almost time to watch my favorite Christmas movie, It’s a Wonderful Life.
In the movie, the film’s main character, George Bailey, takes over a struggling community bank and bails it out of some sticky situations.
Well, as it turns out, banks are searching for a “George Bailey” of their own right now. You see, these banks are in trouble. And if they don’t act quickly, their days could be numbered.
But luckily for them, there’s an easy fix to their problems.
So today, I’ll reveal what the fix is. And then I’ll show you how to profit from it.
Big Banks are in Trouble
On Monday, McKinsey & Company, the management consultant, released its annual report on the financial industry.
For big banks, the news is bad. As it revealed, “A majority of banks globally may not be economically viable.” If things don’t change fast, they risk “becoming footnotes to history.”
You see, according to the report, banks are quickly being overtaken by “fintech” startups — in other words, emerging companies that are focused on financial technology.
Such startups are creating convenient new ways for consumers like us to do everything from pay bills and transfer money, to trade stocks and apply for loans.
In other words, they’re innovating!
The Key is Innovation
These startups are 100% focused on tearing down the way things have been done for decades, and rebuilding them from the ground up.
In fact, according to McKinsey, fintech startups allocate more than 70% of their budgets to innovation. (In comparison, big banks allocate just a tiny fraction of their resources toward these efforts — they’re more focused on protecting what they built years ago!)
This innovation is the reason you can trade stocks for free today from your mobile phone (thank you, Robinhood), or get a mortgage while you’re playing golf (thank you, Rocket Mortgage.)
So what does the future hold for big banks?
Are Wells Fargo, Bank of America, and SunTrust headed for extinction?
Not so fast…
A Solution for Banks
McKinsey’s report wasn’t written solely to be the bearer of bad news…
It also offered a solution for how big banks can turn things around:
Acquire the startups that are doing the innovating!
Some banks are already getting into the action — for example:
JP Morgan recently acquired a payment startup called WePay for $400 million, and bought another payment startup called InstaMed for $500 million.
Citibank, meanwhile, has poured millions into four blockchain startups, three young capital-markets companies, and three payments startups in the past two years alone.
These startups can help big banks stay competitive…
And furthermore, they could be the key for investors like you to earn big profits...
A Few Fintech Startups Raising Capital
To take advantage of this opportunity, you should invest in fintech startups.
Here are a few currently raising capital from investors like you:
Status Money — With this platform, users can anonymously compare their finances with their peers. This helps them find ways to save money and make money.
Lenmo — This startup connects lenders with businesses and individuals seeking capital.
Hundy — This mobile platform helps users with imperfect credit get small loans from a community of lenders.
Keep in mind, while investing in startups can lead to huge returns, it can also be risky. So before investing, make sure to do your research — lots of research!
Please note: Crowdability has no relationship with any of the companies or platforms we write about. Crowdability is an independent provider of education, information and research on start-ups and alternative investments.