Jan 21, 2018 · 20m · a16z
The Next 3 Billion in Financial Services
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this keynote presentation, Angela Strange of Andreessen Horowitz highlights the immense venture capital opportunity in serving underserved financial populations globally. She outlines five core consumer pain points and demonstrates how emerging fintech startups leverage mobile infrastructure, novel underwriting, and user-centric design to transform financial services.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 0.0 Guest teaching 0.0 Guest disagreement 0.0 The host pushing back 0.0
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:15 Refuting market size misperceptions
Angela directly refutes common industry assumptions that alternative financial services are a small market, noting $320 billion in annual volume.
Hardest push from the host ▶ 0:01 No host pushback presentThe transcript consists of a solo keynote presentation where the host provides no questions or pushback.
Biggest teaching moment ▶ 2:05 Explaining the cost of being poorAngela breaks down how lower-income consumers pay $150 billion in fees out of $1.6 trillion in financial services, illustrating structural inequities.
The host holds their own ▶ 0:34 No host expertise demonstratedBecause this is a monologue presentation, the host does not participate or demonstrate expertise.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| The Alternative Financial Services Ecosystem | 0 | 0 | 0 | 0 | Angela Strange delivers a solo keynote presentation regarding alternative financial ecosystems. The host does not interact or ask questions during this segment. | |
| Overview of Five Core Consumer Pain Points | 0 | 0 | 0 | 0 | Angela continues her solo monologue walking through Alice's sample budget and income volatility. No host interaction or pushback occurs. | |
| Pain Point 2: Lack of Savings and Financing Solutions | 0 | 0 | 0 | 0 | Angela outlines consumer savings challenges and fintech micro-financing models. The host remains completely silent. | |
| Pain Point 3: Modernizing Government Assistance with Propel | 0 | 0 | 0 | 0 | Angela details government assistance frictions and credit repair startups in a solo presentation format. | |
| Pain Point 5: Expanding Credit Access and Novel Underwriting | 0 | 0 | 0 | 0 | Angela summarizes the core pain points and highlights emerging international smartphone credit models without host involvement. | |
| Mobile Infrastructure and Emerging Market Credit Models | 0 | 0 | 0 | 0 | Angela concludes her presentation with three venture capital investment themes. The host does not speak. |
Statements from this episode (22)
Strange: Top five US banks hold 50% of banking assets
“There's thousands of banks in the U S but the top five make up 50% of the assets.”
Strange: 50% of Americans use alternative financial services over traditional banks
“It might surprise you to learn that 50% of the American population would come up with an entirely different set of names. And that's because they think of cash checking, or prepaid debit cards, remittances, payday loans, and come up with names like Check and G…”
Strange: Alternative financial services processed $320 billion in transactions in 2016
“Last year alone, there were three hundred and twenty billion dollars in transactions that went through services like check cashing.”
Strange: People making well over median income use alternative financial services
“The second misperception is that it's mostly minimum wage workers that use these services. And as you can see on the rights, yes, more than 25% of those making 15,000 dollars use them, but those well over the median income also use many of these services.”
Strange: Low-income consumers pay higher financial fees for fewer options
“For a large swath of the population, they need financial services more. They have fewer options and they're more expensive.”
Strange: Earnin generates solid revenue through voluntary user tips, not fees
“And what's particularly interesting about Earn-In is that they found that their consumers are so used to feeling gouged by many of the services out there that they voluntarily choose to tip Earn-In, which provides Earn-In with a very good revenue stream and a …”
Strange: 46% of Americans cannot pay a $400 emergency expense
“46% of Americans can't even pay a 400 dollar emergency bill.”
Strange: SNAP Serves 40 Million Americans Across 1 in 7 Households
“Seventy billion dollars. Forty million people in the U.S. Are on food stamps. One in seven households.”
Strange: Propel App Helps EBT Users Budget and Track Balance
“One of the more exciting companies that we have, and you're going to hear from later, is called Propel. And what they've done is they've enabled someone like Alice to load their monthly card into their app. And Propel will show Alice not only how much money sh…”
Angela Strange: US credit card debt has reached $1 trillion
“We've hit pre-crisis levels of credit card debt. Americans owe a trillion dollars.”
Angela Strange: Debt-carrying US households spend $2,500 yearly on fees
“So for households that have this kind of debt, they're paying 2500 dollars a year.”
Strange: Traditional debt collection recovery rates are only 1% to 2%
“And the collection rates aren't that good. They're usually one or two percent.”
Strange: 90 million Americans are mispriced by traditional credit scoring
“By some estimates, there are ninety million Americans that are mispriced.”
Strange: Time spent on LendUp's loan slider correlates with creditworthiness
“And so LendUp will take the data to see how long do I take to slide my slider from a 150 dollars to 200 dollars. And the time of consideration there has actually been shown to be indicative of how good a credit score someone could be.”
Strange: Nova Credit enables immigrants to port foreign credit scores
“Or there's a company Nova, which is connecting credit bureaus all around the world, such that if you came here from India or from Mexico, you'd actually be able to port your credit score and start at a much better basis than if you were starting from zero.”
Strange: Nearly half the global population is unbanked
“By some estimates, almost half of the world is unbanked.”
Strange: Indonesia has 250 million people but only 2% credit card penetration
“Let's take something like Indonesia. Population, two hundred fifty million people. Credit card penetration, two percent.”
Strange: Global banking will expand via smartphones rather than branches
“But what we'll see is that banking services in most of the world are not going to arise via branches and credit cards. They're going to come up via your smartphone.”
Strange: M-Pesa Reached 30 Million Users, 60% of Kenya's Population
“Over the course of 10 years, it amassed thirty million users and the population in Kenya is fifty million. So 60% of the population uses this payment system on their smartphone.”
Strange: Branch scores credit in Kenya using Android OS update status
“We have an investment in a company called Branch, and they do small-dollar lending in Kenya, and they get your own PESA data, but also a variety of other interesting signals, like how up-to-date is your Android operating system? And through that, they can buil…”
Strange: Prepaid mobile minute repayments predict cash loan credit performance
“And what they've been able to show is that the behavior of paying back with prepaid minutes can actually be indicative of building a credit score for real dollar loans.”
Strange: Branch will become Kenya's de facto credit bureau
“Take Branch, the lending company in Kenya. As they start to give more and more loans and build more and more credit scores, they will have amassed enough population on their platform such that you can imagine them becoming the de facto credit bureau and layeri…”