A while ago on Twitter I confessed the term “FinTechS” irks me. The plural. It’s a new phenomenon and maybe we are just using it to be hipsterishly “in” but there is something about it that grates me to no end.
Instinctively it seemed derogatory, too broad, condescending and in the middle of the Great Digital Debate we didn’t need new levels of non-discourse.
It’s finally dawned on me why that is – leaving all grammar considerations aside (it’s an adjective not a noun, people!) it paints every type of enterprise offering anything in the Financial Services sphere that is not a bank with the same utterly broad stroke and boy, that is so very wrong!
To be fair this is because to most, it means “startups who challenge the status quo of banks” – so while that is the case for Challenger Banks and Neo Banks it’s also the case for what I call “Alternative Banking Experiences” – Lending, Payments, etc
Others feel strongly about the logical definition “any company that provides technology for the financial industry” – and that is accurate and in terms of size, dwarfs the startup scene.
Some even think of it to reflect a state of how nimble in thought and execution an organisation is and thus some banks may make the cut as well.
To me there’s a distinction missing to clarify the confusion “Enabling” or “Competing” – is this technology creator, regardless of their size and how they were created (incidentally Wikipedia’s definition here is reminding us that it is, after all, crowdsourced knowledge and you can see who wrote it when it mentions disruption in my opinion), intending to enhance, change and better or to challenge and provide an alternative?
Our industry is starting to suffer greatly from the incessant noise, the -some times purpose-built- confusion in terms and the lack of definitions so it’s important we have it crystal clear what we DO we mean when we say FinTech because it oughtn’t be muddy.
Do we need the Enabling vs Competing distinction?
Does size play a role into it?
Can an incumbent bank be “a” FinTech?
Does it matter what their DNA is?
Does the term inherently include disruption?
Will it exist in 10-15 years?