Banks vs Fintech: A Coronastory

For the last decade, a vast majority of consumer fintech startups have focused on millennial customers.

This new way of winning distribution is quite different from the old way. Yes it’s also capital intensive, but you’re not buying real estate. You have low fixed costs, and variable costs that scale with usage (vs. real estate servicing that you pay regardless of use). And where branch-banking might have had winner-take-all dynamic regionally, there... See more

with debt and subject to central-bank interventions, overstretched asset prices, and market interconnections whose fault lines were revealed six years ago but never fixed, many analysts assume another is inevitable. There’s also a payments-technology precedent: M-Pesa in Kenya, which you will recall got its big break during that country’s 2007 poli

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Fintech has a lot to learn from products like Figma and Dropbox. Social financial products will have as much in common with Pinterest as they do with Citibank.

This let a generation of those apps compete on user experience without being crushed by large banks' pricing power. Customer acquisition for fintechs would be difficult if you could walk into any of the top ten banks and walk out with a 1% rewards debit card (which previously existed but don't anymore at large institutions, due to the Durbin amendm... See more

In FY 2010-11 the share of consumer credit in total bank credit was only 19%. By FY2023-24 this increased to around 33%. Nearly half of this credit is unsecured or quasi-secured (secured against weak collateral), which makes it riskier. In the post-pandemic period, much of the growth in bank credit has in fact been driven by growth in consumer lend

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