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FinTech is not dying … it’s fighting

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After this year’s Money 2020 in Las Vegas, there’s lots of doom and gloom. FinTechs struggling for investment, rats leaving sinking ships, companies desperate for bank buyouts and bank support, and so on. Specifically, this commentary on Medium stood out for me:

Fintech is Slowly Dying and That’s Good News

Fintech was going to eat the banking industry’s lunch, but they ended up in bed together. What a turn of events!

The author, Jeff Scallop, is an enigma. This name does not exist outside of Medium. After checking LinkedIn, twitter, Google and others, the name only appears on Medium which makes me suspect Jeff is a corporate spokesperson writing under a pseudonym. Here’s a few choice excerpts from his article:

In a report on the recently held Money20/20 Conference in Las Vegas, an analyst raves about the number of fintechs that advertised ‘banking’ on their signage and that they were “very clear that the notion of being a bank and being a Fintech are now one and the same” …

Fintech just took a middle management job at your nearest bank branch and now sits all day in a dusty cubicle pushing papers and rubberstamping mortgage deeds …

While the scenario is depressing, the outlook is far from dismal. Customers and startups will do just fine as they move away from Fintech and explore the opportunities arising from the convergence of technologies such as DeFi, stablecoins, crypto, and CBDCs which are poised to effectively disrupt the payments and banking industries.

As Fintech moves into the shadows and is further assimilated by the old banking players, the next wave of innovation is already building momentum after the crash of the ‘great pretenders’ Celsius, Voyager, and Three Arrows. The bankruptcy of the three ‘CeDeFi’ stooges is a cautionary tale of what happens when you aim at the stars but would settle for a quick profit halfway through it.

Some of these thoughts are corroborated by other attendees at Money 2020, but let’s pick up on the three major tenets of the story:

  1. FinTechs are struggling and many will die or be acquired
  2. FinTechs are desperate to work with cash-rich banks, as banks are now flush thanks to the recession
  3. Cryptocurrency is where the place is at

On the first, I agree. I forecast this in January and wrote about it again recently, calling it a bloodbath, but writing off FinTech as dying is taking it too far. FinTech is having a hard time in 2022, especially those firms that don’t have the runway of cashflow to see through 2023, but it just means a shakeout. There is no death.

Many FinTechs will be acquired in the next eighteen months by both and challengers. It’s not easy pickings for banks as those FinTechs that have the best ideas will still see those ideas through, probably with another FinTech firm that has a decent access to investment markets.

On point two, banks have been looking for partnerships with start-up FinTech firms for years. Partnerships are hard, but they will be open to firms to work with them. Many FinTech firms are solving the things banks do badly, such as customer onboarding (AML), compliance (RegTech), payments online and via mobile and more. There’s harmony here, and this will flourish through the next eighteen months. My only concern is that those firms in Category1 (cash starved) will be forced to sell-out their ideas at a bargain basement value but hey, that’s what happens in a crisis.

On the final point, crypto is doing pretty interesting rollercoaster rides at the moment. I wouldn’t encourage people who are risk averse to go near them. But if you’re a good risk manager and can tolerate market movements that see a 20% rise today and 40% drop tomorrow, go for it.

Is it the place to be? For me, yes, but I’ve been in that space for a long time. For you, make up your own mind, but I am not a financial advisor and investments can increase and decrease as shown above. You need a strong stomach for crypto.

Either ways, the fictional Jeff Scallop wrote an interesting piece and worth a read and, as a closing thought, I agree with Andrzej Sapkowski ...

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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