Three global fintech trends
Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by Cyprus based Finance Magnates in an article — by Solomon Oladipupo, “Fintech Funding Slashed by Almost Half in 2022. Will 2023 Be Any Better?” — regarding enthusiasm for financial-technology (fintech) venture capital investments.
“The model of growth at any cost may have held some logic in a zero-interest rate environment but lost a sense of reasonableness as financing costs escalated.”
2023 will be different than 2022!
Investors have reset their expectations for financial technology startups and now seek a sustainable reasonably paced path to profitable growth or at least breakeven.
Expect more integration of direct sales and fintech into smartphone platforms (Apple, Android, Samsung) and social media (like TicToc, Instagram, YouTube, and Snap) for instant purchases, buy-now-pay-later offers, warranties, and insurance protection.
Look for banking functionality to be integrated with human resources (HR) for increased implementation of on-demand pay to attract and retain employees in a tight labor market.
Branded and store cards
Expect to see more branded and store card offers as fintech companies such as Marqeta and Power Finance market white-labelled credit card issuance programs that provide robust consumer insights to companies. These platforms are designed for companies, brands, and even banks to offer customized credit card programs with targeted services, personalized promotions, and easily redeemable loyalty rewards, all integrated into mobile and web applications. Imagine banking with your favorite brand! With what brand would you most want to build reward points?
Quoted article excerpts are below:
Michael Ashely Schulman, a Partner & the Chief Investment Officer at Running Point Capital Advisors, believes that the dent in cryptocurrency prices as well as many company collapses recorded last year made enthusiasm for fintech venture capital investments fall dramatically in 2022. Schulman added that “the closing of initial public offering opportunities on the heels of declining stock markets, the end of the SPAC fervor, and the closures of many once promising and well-backed companies” are other negative factors.
“The model of growth at any cost may have held some logic in a zero-interest rate environment but lost a sense of reasonableness as financing costs escalated,” Schulman told Finance Magnates.
Additionally, Schulman believes that investors will continue to reset their expectations and seek sustainable ways to stay profitable.
“I foresee several global fintech trends going forward: a continued ramp up of embedded financing along with a thinning of the ranks amongst the top players; further implementation of alternative financing with a slew of new and up-and-coming players growing the pie; stronger focus on fintech solutions in emerging markets and fast growing regions like Nigeria, Indonesia, and Brazil,” Schulman explained.
“people need banking, not banks”
Bill Gates, circa 1990’s
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Past performance is not indicative of future results. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-23-12
