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Paul Jeffery's avatar

Great content Marc. Bravo

The woes of Fintech, at least on the lending side (see Funding Circle / Lending Club etc), look set, to continue for a long while to come (maybe terminally so). Aside from COVID-cum-attendant govt actions related headwinds, the core reason for this is that FinTech lenders have not shown meaningful innovation where it matters most. Namely, in being able to differentially price and make available (to borrowers and investors) credit at scale in a materially better way than FinIncumbents. So where is the core value proposition? Unless there is a real step forward that FinTech lenders can bring and apply in credit assessment and pricing, there is only so far that relatively cheap digital distribution and slick, quick service / loan disbursement will get them.

If a truly material step forward / innovation break-through is to come in the assessment and management of credit risk, a break-through which is hallmarked by a new and materially differentiated pricing of credit combined with a genuine widening of the circle of availability of credit, it seems to me only big tech, not the fintech hoard, has a plausible chance of bringing it to pass. My hunch is Ant Financial / Amazon / Google / FB have the best chance of upending FinIncumbents and owning the future of lending. If big Tech do come to own the future of lending, it will be because they brought genuine innovation in credit assessment and in so doing created material core customer and societal value.

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Charlie Delingpole's avatar

Great newsletter

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