Topics in ClimateTech + FinTech: An ongoing controversy, plus Apple's advances on your bank account.
S1E9 | Highlights and impact of this week's top tech themes.
Hi, Friends —
Welcome to [our digital disco]! Keep scrolling for this week’s key themes in tech news and other misc. thoughts (Snack Time). You can also check out last week’s newsletter here.
Notable Themes
☞ Apple’s recent advances into FinTech (and our bank accounts).
Last week, Apple introduced a high-yield savings account for Apple Card holders. The firm is an increasingly key actor in the global FinTech industry, and the savings account is just one of many releases to come of Apple’s FinTech offerings. Apple Wallet, for example, is responsible for nearly half of mobile wallet transactions. Apple controlled an estimated $800B of payments volume in 2022, which is estimated to scale to $3.2T by 2030.
Why does it matter? Tech giants such as Apple are well-positioned to be successful in FinTech — their large user bases provide easy-to-reach customers, plus easy opportunities to integrate payments into existing products. So far, Apple’s financial products don’t appear to be a huge driver of revenue. What they do achieve, however, is that they embed customers into the Apple ecosystem. It’s easier for customers to add on an Apple card product than adopt one from Google or another competitor. In the longer term, consumers may use one company, such as Apple, for products ranging from phone and laptop hardware to services across music, streaming, payments, and savings. This has huge implications on the future of our [consumer] financial products, the power of tech giants, and the ability of other companies to compete for market share.
Pros: Many consumers may benefit from Apple financial products and a seamless integration with the Apple ecosystem. Together, a future single platform may streamline financial services and give users a convenient, one-stop-shop to manage their finances, communications, and other tools. This might also improve financial literacy, as the tools are accessible to those who may not otherwise dive into their finances — helping users learn to manage their $$$ responsibly.
Cons: When a small number of firms control a significant portion of the market, they have the power to influence pricing, innovation, and competition. A few large tech companies, such as Apple and Google, already have significant control in key areas. The concern is that Apple’s FinTech strategy could further contribute to its consolidation of power. Some potential side-effects? Higher prices for consumers, limited innovation, and reduced competition/high barriers to entry for as smaller or newer companies. There are also broader implications for the economy as a whole. The failure of a large financial institution could have systemic effects on the economy. Allow me to paint you a worst-case-scenario: If a large tech company were to fail, and it held significant customer deposits or investments, it could cause widespread panic and a loss of confidence in the financial system. The latter could trigger a wave of withdrawals from other financial institutions (what many feared following the collapse of SVB), leading to a liquidity crisis that spreads throughout the economy.
☞ Will solar geoengineering reduce climate change, or burn us all up?
Solar geoengineering — a method which seeks to mitigate climate change by reflecting sunlight back into outer space and cooling the Earth — is becoming a highly debated topic in climatetech. Billionaires including Bill Gates and Dustin Moskovitz are supporting its research. Not all climate scientists support the technique, however. Many express of major concerns of its questionable efficacy and unintended consequences — including the possibility that solar geoengineering might inadvertently and exponentially expediting global warming exponentially.
Why does it matter? Solar geoengineering methodologies remain largely contentious. While many have suggested that these technologies could be a solution to the global climate crisis, much more research is required before any large-scale deployment. In February, 60+ researchers published a letter calling for more rigorous study of solar geoengineering and small-scale field experiments, expressing that normalizing these technologies as a climate fix is incredibly dangerous. Understanding social geoengineering and its implications is crucial as decision-makers explore various strategies to combat climate change.
Pros: Solar geoengineering has the potential to lower global temperatures, slow down the rate of climate change, improve overall living conditions, and reduce climate-related disasters. An accelerated investment in research might help find a viable solution to decrease the intensity of climate change's effects. The technologies could also buy more time for the world to transition to renewable energy and reduce greenhouse gas emissions. Many advocates argue that our current efforts to reduce carbon emissions may not be sufficient to limit global warming to safe levels, and see solar geoengineering as a necessary stopgap to help prevent temperatures from rising to dangerous levels.
Cons: Critics argue that these technologies could produce unknown side effects, such as disruptions to ecosystems, that could instead worsen climate change. Much of the testing is being done in Africa, a continent highly vulnerable to climate change and already experiencing its consequences such as droughts and food insecurity. Finally, properly implementing these technologies would require large-scale international cooperation — which poses major concerns regarding the feasibility of implementation
Snacktime
📓 Reading: My High-Flying Life as a Corporate Spy Who Lied His Way to the Top — an exposé from an actor on his gig stealing secrets from Wall Street elite.
♬ Listening to: Florence + The Machine’s Mermaids
✰ Thinking about: Friendship. The expected, the unexpected, how we navigate friendships, how we deal with misunderstandings, how we navigate life changes, and — above all — what it means to be a friend.
Next up
✎ Unexpected applications of generative AI — and where we might find them in our future day-to-days.
✿ As always — any and all feedback is welcome! In the meantime: give someone a hug and say an ‘I love you’ this week. Make the world a little happier.