After the economic crisis of 2008, new entrants in banking came along, led by distrust towards financial institutions. Eleven years later, the landscape sees fintech and crowdfunding going hand in hand — the world’s leading fintechs are using crowdfunding to cement and enhance their relationship with their customers.

In the UK alone, fundraising volumes for fintechs jumped from £10.2 million in 2017 to £52.8 million in 2018. In December last year, digital bank Monzo raised £20 million from retail investors — no mean feat, as it entails writing a prospectus, which is a lengthy and expensive process. Moreover, Monzo’s crowdfunding raise capped all investments at £2,000.

By being deeply involved, there emerges a secure base of customers and winners. In Monzo’s case, it significantly enhances each customer’s lifetime value; they are less likely to move providers, are more likely to refer friends and family, as well as buy products and services.

Many fintechs are building their own platforms to manage ownership; businesses are offering equity to build enduring affinity with their customers. When the cooperative movement in financial services fell out of fashion in the 1970s and 1980s, it signalled the rise of big-bang banking institutions with their joint stock structure. Technology is fast changing this, making the offering of products easier with hundreds of members. This shift to consumer empowerment does not stop with finance — every sector traditionally associated with consumer exploitation is are riding the wave. Insurance, property, the legal system — these are but a few industries that are reinventing themselves.

In the future, it is not that difficult to envision businesses that have hundreds or even thousands of owners, customers and advocates. It merely seems to be the natural transition of things — the redefining of ownership as customer becomes shareholder.

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