4) Advent of Digital Lenders:
Whether SME, personal or even at the point-of-sale, digital lenders rebounded from difficulty and made their mark in 2017. Next year is likely to see more of that, as reports predict them to top banks in the area of personal loans in 2018. This is despite the abysmal fall in the share value of Lending Club, one of the originals in this space. And it is evident in the growing popularity of a point-of-sale lender such as Affirm (which just raised an additional $200 million in funding), or Intuit’s first SME loan product through QuickBooks, called QuickBooks Capital. It is no surprise that traditional financial institutions are also marking their space in the digital lending landscape. Think Goldman Sachs’s online consumer lending platform Marcus, which reached its annual origination goal of $2 billion for the year a month early in November. Just as with P2P, money changing hands is less and less a face-to-face phenomenon.
5) Diversity in (Fin)Tech:
Diversity was a major topic in 2017 for many industries, including technology, banking, and fintech. This year particularly highlighted the issue for startups and technology companies like Uber, as women like Susan Fowler pointed to serious flaws in the company structure. And SoFi, once a poster child for fintech muscle (remember not so long ago it was going to get a bank charter?) was humbled by the resignation, amid a storm of accusations, of its brash CEO, Mike Cagney.
As a blend of the technology and banking industries, fintech’s own diversity standings were also called into question during 2017. A recent Bloomberg report shows only 17% of startups are focusing on diversity and inclusion, giving rise to some poignant questions like this one from Sallie Krawcheck, CEO and founder of women-focused investment firm Ellevest.
Some even pointed to women’s role in cryptocurrency, often viewed as an alternative in finance open to everyone. Spoiler: women in bitcoin, much in the same way they are in fintech, remain underrepresented. On the positive side, however, more women are starting fintechs, heading innovation labs and leading tech efforts at banks. Let’s see what 2018 brings?