How to join the network
The term “fintech” has become all the rage; investors and media can’t stop talking about it . Many people also have been talking about the “bubble” in the tech industry, but could there be a “bubble” in fintech, as well?
The Wikipedia definition for financial technology is pretty daunting, and states global investment for fintech has increased from $930 million in 2008 to $12 billion in 2014. It even mentions Bitcoin and startups like Lending Club , TransferWise , Prosper , Affirm and Wealthfront .
The signs of a bubble are everywhere as banking executives like Sallie Krawcheck are leaving traditional banking jobs for startups . Even 60 Minutes featured a story about it that aired on May 1, 2016 . Cracks in P2P lending and robo advisors
While fintech seems to booming, there appear to be some cracks developing in specific sectors like P2P lending and robo advisors. The P2P lending space has been under attack recently. The stocks of Lending Club and OnDeck Capital have plummeted and are trading at all time lows.
The lending industry is under intense scrutiny by investors and regulators as the CEO of Lending Club was forced to resign in a scandal. The U.S. Department of Justice has launched an investigation, which has people wondering if there are other cases of fraud associated with the management of the loans in the lending industry. As long as the money keeps flowing, investors and entrepreneurs are going to flock to fintech. The other problem in the lending space is the lack of capital available to lend out. The normal supply of capital from hedge funds, banks and other investors has dried up as they can find the same rate of return elsewhere. When interest rates were low, P2P lenders offered a great […]
