Startups And Small Businesses Flock To Fintechs As Banks Flounder

The annual letter to shareholders can be a soul-searching exercise for CEOs. In the shareholder letter that Jamie Dimon of J.P. Morgan Chase released last April, he was sober and fretful about the future of big banks. Rightfully so. “The growing competition to banks from each other, shadow banks, fintechs and large technology companies is intensifying and clearly contributing to the diminishing role of banks and public companies…” Dimon writes.

He sees the threat of demise from all sides. Walmart
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is getting into consumer banking, leveraging 200 million customer store visits per week, he says. Tech giants like Apple
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, Facebook, and Amazon
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are moving into credit cards, payments, and personal finance. Fintech companies raked in $140 billion in venture funding in 2021, and around $75B in 2022.

Jamie Dimon avoids a key point: in some ways, the existential threat facing banks today is their own fault. They overlooked and underserved small businesses, the backbone of job growth in the U.S. economy. Two weeks ago Wall Street Journal reporter Dion…