Financial institutions are the most violent structures remaining in the modern world today. Violence does not have to come with lashes and blood. Violence simply means when a party has a disproportionate power and exerts this power on people to extract the fruit of their life and work. Their instruments obviously are called benign things like overdraft, advice, access, accreditation, etc. Their power is mostly created by excluding access to information, capital and opportunity. They are guarding the gates and seeking rent. This violent structure is also assisted by policy and government. Often populist political factions, advocate for fiscal and regulatory regimes (from taxation to the environment and trade laws) that do not truly benefit people and maintain power within the system.
The inherent complexity of the economy and its interaction with the markets and policy as well as the quantitative and analytic nature of the world of finance makes it harder for people to understand what is going on and to find the best course of action for themselves. Whether it is how to spend their money, allocate capital, build a career and wealth or vote on a financial policy agenda.
In this context, imagine a world where people are informed; they understand simple concepts such as how a loan and interest works, they know how central banks policies influence their wealth and wellbeing, how they can allocate their capital to productive means in society and benefit from the growth without rent seekers, they know how markets work and have a disintermediated access to financial and real estate markets. The taxation playing field is equalized, everyone is paying a fair share and use of tools such as corporations, trusts and complex financial vehicles are eliminated or not limited to the wealthy. In this environment, democratic policymakers also have the ability to understand a regulatory framework and communicate its ramification to the public. This is the world where financial institutions are no longer powerful or violent but they perform a vital utility in facilitating capital movement and its wise allocation in bettering the society.
How can a company help create such a world?
The sources of power are two factors, access and knowledge. In the past two years people's interest in finance have exploded. Given this interest, many companies also have created products that facilitate access to the markets. Today, companies offer fractional investing in anything and everything, there is access to guarded assets such as private equity and venture capital. Financial products such as loans, insurance and investment are easier and cheaper than ever to purchase. The trend of giving better access continues. The other area that is still fragmented and not well served is providing the knowledge on how to benefit from this availability to access. Imagine a world where a person can make the most optimal decisions about spending, financing, savings, investment and building wealth without the need to hire a private wealth advisor or expert financial planner. For example, today people are lured by false marketing, inaccurate representation of financial tradeoffs (e.g. buying a car with high interest loan distorted into an attractive weekly payments), doing investments without understanding the risk (e.g. in crypto or meme stocks) or even not taking appropriate risk (e.g. for career growth or keeping too much cash). Imagine a product where one can access the best information about a situation and can see for themselves the ramification of various choices and options. Then they easily access the financial product related to the optimal option.
In this world, people also support politicians that have a logical and fact-base agenda that benefits the overall society with appropriate public investment and fair regulation. Imagine that a person can "see" what could happen given various policies implemented. Imagine they have access to data and information so that they can move beyond the short term and often emotional impact of political rhetoric.
If you look at the most wealthy, they have access to the best finance and legal experts to navigate the economy, markets and regulation. The asymmetry of power is both in the realm of information and access. To achieve a true democratization of finance we need close the gap in both these areas.
