Coffee and the #FinTech Bubble

Disclaimer: If you started reading this in the hopes that it will be chock full of figures to sustain my point, you may want to stop now. This is a ranty personal view and if you choose to read it, you’ll have to source your own reports to prove or disprove it depending on what side of this equation you find yourself in and what makes it easier to get through your FinTech day.

I get a lot of “My name is John Smith and I am as of now interested in FinTech and available on Monday at 15 pm around Monument, I will buy you a coffee to hear your opinions as your name keeps coming up” demands on Twitter. Needless to say this thrills me as I love coffee. Also because I’m independently wealthy and do not need to worry about selling my time and knowledge as a consultant. (This, for those of us who sometimes miss it in my articles, is sarcasm.)

There is an acute devaluation happening in FinTech. Of knowledge, of time and of actual sums of money. There is no point wondering why there are no “became rich through FinTech” stories as we may attribute that to it not having yet reached its potential, neither is there any point discussing the plight of trying to sell knowledge in a market intent on maintaining mediocre standards of know-how that accommodate the status quo. But it’s worth looking at the bigger numbers thrown around in the industry to see if those at least reward value. It seems the numbers simply don’t make sense here either. Part of it is normal dilution as the space is becoming overcrowded but part of it is baffling.

I don’t begrudge the superstar fund raisers their 10th round or their undeserved billion evaluation as it’s not all about whether eTorro is better than the host of other propositions in its space or SoFi is the exact same one as tens of other attempts in the US P2P market albeit with a more defined segment, it’s about who was in front of investors when they agreed to it. Same goes for why a new challenger bank would raise tens of million on a hope and a dream while a comparable proposition would have raised a quarter of that in their entire existence.

That may not be intuitively fair but it’s normal. Technology has never been about the pure product or solution but about what it is that transforms it from a scientific endeavor to a business proposition – the people behind it.

With that said, there has to be an intersection point where value of people’s salemanship can not cover lack of tangible technology, right? There is no way we, the industry, would finance absolutely non-existent preposterous propositions yet let valuable tech fall by the side of our golden bricks pathway, right? We may get confused by the lack of established vernacular and intentional consultancy speak making everything sound equally shinny and impressive and we may fall in love with some of their people but surely in our hearts of hearts we know enough collectively that the overall result will be one of the wheat separating itself from the chaff, right? Wrong.


In the past 2-3 years it’s almost like we’ve become inundated with both people and proposals that are of very limited quality and yet we’ve also gotten less and less willing to be vocal about it. If knowledge is the emperor, the emperor is slowly shedding his clothes in our industry and we’re going to stand by and watch it become butt naked and not even point and snigger. We make wider and wider of bets. We’re less and less inclined to ever call a spade a spade and we found a way to believe this bubbling format of hundreds of incubators and accelerators, 30 challenger banks in one country only and growing YoY in people and solutions at a astounding rate is normal.

We are even so far removed from common sense that we can wonder IF this is a bubble. We compare ourselves with Tech in general, they are booming, in a healthy manner right? Why not FinTech, then? Because “Tech” is the underbelly of everything. Every aspect of our lives. FinTech is an overgrown mushroom of one thing only: the way money providers sort out their backend and their frontend to answer consumer needs.

Think about it – ours is a gazillion-billion industry which we believe will forever continue to thrive built solely around the fact that banks and others were unable to get their act straight on their own. Same goes for insurance hence the now emerging “InsureTech”. Where is RetailTech though? Or AutoTech?

One would argue it’s not only fixing but looking ahead and innovating and disrupting hence the space for the flock of savior-unicorns but why are we so accepting of the premise that innovation was only their apanage and non-accessible to the incumbents? Because they are big monolithic organizations paralyzed by a culture of fear to move which is why they need FinTech. Circular, isn’t it?

Most of us have accepted that a period of serious maturing and consolidation has to happen in FinTech fast and in a few years it will hopefully, mercifully even disappear as a term and be just “Tech” once again (with its wonderful Augmented Reality, Design DNA, Data and AI focus as the visionary of us – Brett King for instance have noticed). It will mean we finally got our collective house in order and are able to give people access and overview of their MoneyMoments in a simple, enjoyable way that flows into their lives.

I believe we are no further than 3, maybe 5 years away before this whole industry built on how culture prevented banks from fulfilling their purpose would have finally deflated and shrunk to a maybe a quarter of its size today so I would say taking a sudden interest in having FinTech coffees with me may be a poor career choice at this time, John.

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