Is Fintech Already Past Its Prime?

April 27, 2021
Kevin Larkin

Fintech has been one of the most exciting and booming industries over the past decade and has only seen more growth since the start of the pandemic. The need for contactless payment methods and to be able to access all financial information from home has led to incredible new startups entering the space globally. Especially with the increased interest and usage of cryptocurrencies as actual viable currency to be used in transactions has only left many of us to believe that the industry is set to explode in the upcoming decade. However, some seem to think otherwise, that fintech’s best days are actually in the past and there’s not much opportunity for upwards expansion past this point. Many of the ones who think this are actually bankers, who have said that the most exciting fintech innovations have already happened. But unless they have some sort of crystal ball, how could we be certain to take their word? Is there substantial evidence to back up their seemingly erroneous claims?

Looking deeper into this, it seems that although there have been exciting recent new startups, few of these actually offer industry changing innovations. Instead, they apply a similar fintech idea to a new market or use it in a unique way, but don’t actually change the formula up too much. Remember the difference between an invention and innovation is that the former is a completely new idea, and innovation is simply expanding on an idea or product that already exists and modifying it seemingly for the better. According to an article by Sifted, rather than add something completely new, fintech appears to do things banks should have done a while back, and instead making these processes more efficient for consumers. What some of these bankers or others heavily invested in the financial or technology industry are looking for is something like a Tesla level innovation rather than taking the same ideas and recycling them, making them only slightly better with each new iteration. Spiros Magaris, who is a fintech venture capitalist, says that although he cannot obviously predict the future of fintech, “I imagine — and hope — it’ll have the same impact the original iPod had on music and how the iPhone changed communication and access to media. Those markets existed before Apple entered it, but we all know it was never the same thereafter.” Questions like these should hopefully inspire those who have already achieved fintech greatness, or are even just looking to get into the industry themselves, to rethink the entire industry as a whole rather than just a small niche market within it.

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