Although it is widely believed that financial technology is disrupting the traditional banking industry, many fintech startups have found themselves acquired by banks. Venture capitalists have yet to find a financial technology that is a threat to even a part of the banking business. Sheel Mohnot, a venture capitalist who focuses on fintech said, “We realized along the way that you really have no choice but to work with the banks.”
Under Trump’s administration, it will be harder for fintech to disrupt banks. Trump’s plan to ease post-financial crisis regulations will give banks more freedom to take risks in areas where fintech startups are currently finding the opportunity to develop in. Venture capitalist Arjan Schütte has been moving his firm’s investments away from fintech disrupters and toward startups that are working with existing banks.
P2P lenders have realized the difficulty to fund loans without having access to cheap deposits, as the banks do. They also struggled with the high cost of marketing to acquire new customers. I researched P2P lenders for the individual assignment, and found that Lending Club had the highest technology IPO in 2014. However, Lending Club’s shares have been trading far below the day of their IPO.
Reference: https://www.nytimes.com/2017/02/22/business/dealbook/silicon-valley-tried-to-upend-banks-now-it-works-with-them.html?smid=tw-share&_r=0&referer=https://t.co/7Wl3R7wfOn&_lrsc=06912909-a0ca-4685-bf7b-72cc34e89575