Chris Myers the co-founder and CEO of fintech startup BodeTree – a financial management solution for small business organization, argues that the fintech industry is failing. While he firmly believes in the future and growth of fintech, the industry itself needs to approach things differently and come up with creative solutions to the opposing forces of fintech.
Firstly, Myers believes that there is a contradiction between the fundamental values of finance and tech itself. While technology is fast and eager to change, finance, on the other hand, is a slow moving industry. When investors fund fintech companies, they expect growth similar to the speed of tech. However, the truth is that fintech companies need to grow similarly at the speed of the financial industry.
Secondly, fintech at the core is similar to many social media companies, it is in the business of handling and processing data with the difference in financial transactions. Because of this, investors are pressing fintech companies for rapid growth, rather than gradual growth, in which fintech organizations begin to make risker and risker decisions.
Lastly, financial institutions hate change. Due to the nature of financial institutions, the industry itself is highly regulated and more conservative in values. Innovation within the industry poses many questions to even the simplest of solutions.
In my opinion, fintech is still a relatively new industry that is rapidly growing. Although finance and tech are two completely different industries with different core values, fintech is a new industry that is needed to improve financial transaction for consumers. While it might be true that financial institutions hate change, and that investors are pushing unrealistic expectations for these fintech startups, the smart investors, those who are pursuing growth in the long term, the ones who are willing to stick to the core values of fintech will be the ones who lead the fintech industry when it matures.
Source: http://www.forbes.com/sites/chrismyers/2017/02/07/3-reasons-why-fintech-is-failing/#511f77cf7b6b