Forbes contributor Chris Myers recently published an article (Myers, 2017) that outlined 3 reasons he felt FinTech is failing – 1) There is a fundamental strategic contradiction between tech and finance, 2) Market realities encourage short-term thinking, and 3) Incumbents in the market are powerful and resistant to change.
While I agree with Myers that the tech and finance industries have different timelines for success in the marketplace, I disagree that the three reasons cited are the only or even main factors that will determine the longevity of the FinTech market. I believe the major underlying factor in FinTech is deeply rooted in other societal factors. For instance, I believe the online lending market is fueled by the consumers desire to have a more streamlined loan selection, acceptance and closing process, as opposed to physically having to personally visit multiple financial institutions. For FinTech industries like digital wallets, the attractiveness to the consumer is once again the convenience, and not having to carry multiple forms of payment. These consumer conveniences are not diminishing and I feel will continue to advance the FinTech market, thus offsetting any temporary declines most probably attributable to normal up and down business fluctuations.
The uncertainty I have is more about how the change of the guard in the U.S. White House, along with the Republican majorities in congress, and the latest talk of relaxation of regulations will affect the FinTech industry – a topic I will save for a later date.
Myers, C. (2017, February 7). 3 Reasons Fintech is Failing. Retrieved from www.forbes.com: http://www.forbes.com/sites/chrismyers/2017/02/07/3-reasons-why-fintech-is-failing/#639f869d7b6b