The future of fintech is bright, almost blindingly so, but many of the entrepreneurs in the industry fail to grasp what will eventually lead to the downfall of countless fintech firms, particularly those that lend money – a tendency to forget the past and inability to say ‘No’.
FinTech (or Financial Technologies) is undoubtedly the new buzzword in the banking scene. Everyone is talking about it, be it the biggies or the newcomers. Start-Ups have sprung like weeds around the concept of applying latest web or mobile based technologies in finance & banking.
But most of these firms have a tendency to ignore the power of history. When it comes to banking, or investing in bank stocks, few things are as important as history. An investor with deep and visceral appreciation for the historical swings of the credit cycle gets a definite competitive advantage. However, these new tech-based lenders often tend to neglect history and in their desire to acquire clients, tend to say ‘yes’ top every request. They just dismiss hundreds of years’ worth of experience reflected in the history of banking as outdated. There demise will begin the very day the credit cycle takes a turn for the worse.
Today’s Needull, an article from the pages of FOX Business, is actually a warning to such lenders who play with tools of future but tend to neglect the past.