Frontlist | The Five Best Fintech Books To Get You Started

Frontlist | The Five Best Fintech Books To Get You Started
on Feb 09, 2021

Fintech is exploding by any metric: funding, customer counts, revenues, corporate acquisitions... The number of people working in fintech has also grown prodigiously over the last few years. As people migrate from other sectors into fintech for the first time, I frequently get asked the same question: what can I read to learn about the space? There are many answers. The number of fintech newsletter writers has grown just as quickly (maybe more quickly?) than that of new employees. Many Substacks (mine among them), Clubhouse conversations, and podcasts cover topics from product insights to deep-dives to weekly news wrap-ups to contextualizing fintech more broadly. A few months ago, I profiled some of those writers here at Forbes. But to really develop a better understanding for why fintech matters, there are five books I highly recommend: 1. The Unbanking of America, by Lisa J. Servon If there is one book that should be required reading for people starting in fintech, it is this one. The Unbanking of America, written by University of Pennsylvania chair of the City and Regional Planning Department Lisa Servon, takes a critical view of how the financial services industry is fracturing into two distinct systems: one for rich consumers, and one for the half of Americans living paycheck to paycheck. It’s a troubling statistic: almost half of Americans work in low-wage jobs. And while the book’s subtitle is How the New Middle Class Survives, the book itself paints a picture of a US in which the middle class no longer exists. Instead, the rising cost of living paired with income volatility, low savings, overused credit, and an anemic job market have driven many Americans out of the mainstream banking system to alternative financial services providers. If you’ve ever wondered why some people prefer to use payday lenders and check cashers over banks, or how to design truly inclusive consumer financial products, Servon artfully embeds herself in the communities where banks are no longer the best financial option. 2. The Ascent of Money, by Niall Ferguson The Ascent of Money is less a paean to financial technology than a critical exploration of how financial events shaped modern history. Published at the zenith of the financial crisis by then-Harvard professor Niall Ferguson, the book tracks how money and credit developed alongside each other and the events that still echo in today’s banking system. Ferguson weaves together events over centuries, such as the Amsterdam and Paris joint stock company, the 18th-century Mississippi Bubble, the 2001 Enron bankruptcy, and the Great Recession, in a way that illustrates how financial history is cyclical. Does home ownership enable entrepreneurial risk-taking, or fuel speculative asset bubbles? How did bond markets - the descendants of which are accessible to consumers on Vanguard, Betterment, and Wealthfront today - enable statecraft in Renaissance Italy and Hapsburg Antwerp, and why were the real winners the financiers? And what can the Dutch East India company tell us about the rise of public and private cryptocurrencies? The book provides an entertaining deep-dive into the lessons of financial history that still resonate today. 3. A Piece of the Action, by Joseph Nocera In A Piece of the Action: How the Middle Class Joined the Money Class, New York Times NYT -0.4% NYT -0.4% journalist Joseph Nocera writes on the gradual migration of Americans from an economy of savers to one of credit users, speculators, and spenders. It’s amazing that the book was written in 1995, given how relevant its observations are to the explosion in Robinhood trading and buy-now-pay-later purchases today. Nocera traces how the thrift culture that was ingrained in consumers following the Great Depression and World War II was undone by 1970s inflation, interest rate volatility, and a declining general standard of living. For any product managers developing the next generation of credit cards - or the technology that will replace them - this is a must-read. 4. Debt: The First 5,000 Years, by David Graeber This book reads at times more like a PhD thesis than a best-seller, but it is the canonical recommendation of the anthropologists I know in fintech. David Graeber takes readers on a 500-page tour through the history of civilization and makes the case that credit markets, rather than money, were critical to the development of societies (and at times even preceded the emergence of money). I especially found the analysis of gift cultures interesting: how do people exchange value with others, and how can we simulate the social exchange of value through services like Venmo, Splitwise, and WeChat group buying? 5. The Financial Diaries, by Jonathan Morduch and Rachel Schneider I was handed a copy of The Financial Diaries when I joined Petal. It provided an eye-opening perspective on how the American Dream has moved beyond reach for many Americans, and why it’s so critical to build financial tools that help people improve their personal financial positions. The authors worked with the Financial Health Network to track 235 low- and moderate-income households for a year to understand how they made and used money. And while many fintechs talk about their commitment to ‘improving financial literacy,’ one of the resounding findings was that many of these houses are perfectly literate. In spite of understanding their financial options, these houses deal with income volatility, high banking costs, and inadequate social programs in a way that forces them into a cycle of borrowing and low savings. Source: Forbes