Questioning FinTech, Again


As the second quarter of 2016 ends, a number of article have appeared that question FinTech. Several appear below, featuring pointed questions about the value of FinTech investment and the hype surrounding some FinTech business models.

The effect of the Brexit vote on FinTech gets its due as well with long-time banking observer and commentator Chris Skinner providing a more level-headed view in this week’s links:

Brexit probably won’t kill London’s booming FinTech scene

Though some banks are preparing to leave the U.K., the European Union’s relationship with countries like Norway and Switzerland suggests that it’sunlikely that the U.K.’s exit will result in turmoil for British banks, writes Chris Skinner for Quartz. He’s quietly positive, writing in his own blog that “I don’t think we’re going to see the meltdown the doomsayers are rumour mongering, and I don’t think we’re going to see the end of passporting our bank services across Europe.”

‘Very questionable models’: the co-founder of a FinTech startup addresses the elephant in the room

“There are some FinTechs out there that have got some very questionable models. If you’re giving away your service for free, your sole lifeline is venture capital money. There’s no real discernable revenue stream,” said Currency Cloud co-founder Stephen Lemon Tuesday during a SAP event on digital disruption. As venture capital dries up, it’s up to FinTech firms to find alternative revenue streams, reports Business Insider.

“Fintech has delivered more hype than returns” – Mangrove Capital co-founder

Meanwhile, PaymentEye reported remarks by Mark Tluszcz, CEO of the venture capital firm Mangrove Capital Partners, in which he says that “fintech has delivered more hype than returns” so far. FinTech has yet to turn the financial service industry on its head. “I am not a skeptic, I have just not yet found a company that is truly disruptive,” he said.

FinTech bright future marred by hype

The excitement over FinTech has left many missing the point, David Evans and Richard Schmalensee argue in a piece for Yes, the sector is “ripe for innovation,” but that doesn’t mean that entrepreneurs and investors should flood the market now with hopes of easy money. Beware the hype and know that in order to be successful they must find the balance between a need in the financial services and a feasible business model.

The hollowing out of financial services

Are FinTech firms really shaking up the financial sector, or are they simply chipping away at existing or underserved customers? That’s the question Simon Cant addresses in a new post for Medium. Yes FinTech firms are more nimble in the short-term, but it remains to be seen whether they can compete with established incumbents in the long-term.