The numbers are in and the jury is out. The world over the fintech craze that underpins lending outside the traditional banking ecosystem continues unabated. Whether the channel of consumption is online, mobile or the services packaged differently such as pay day lending and layaway financing, investments continue to pour in chasing opportunities in a vertical that is quickly getting overcrowded with little to no service differentiation and a continued insistence on insight wizardry riding off copious amounts of personal data ingested.
First came sports betting, taking local markets by storm, surpassing the more dominant utilities in daily processed volumes and total value transacted. Now lending has come to the fore, arguably riding the coat tails of betting with many reportedly seeking to replenish the wallets that funded the day’s loss, putting good and expensive money to chase the bad. Both powered by our much celebrated breakaway mobile money adoption.
Banks have caught the bug, spurred to action by the fear of missing out. Board room decisions made, where a smart strategy would have informed otherwise. Banking has lost its personality, it is all about bits and bytes now. Yes, let us close the branches and let us take to mobile. The handshakes and smiles are no more. It is now reduced to a steely and cold digital exchange. Familiarity and empathy have vanished from the fraternity’s eyes.
Payment gateways have felt the pinch. The transaction commission pool is fast drying up as payments becomes commoditized into a feature that will be embedded into every experience natively. Players in this space are starting to look intently at years’ worth of transaction information and mulling over their next service iterations, building moats to strengthen them for the coming consolidation.
Empathy, context and relevance need to inform the disrupters of the near future. To connect beyond the transaction value and the algorithmic greenlight, metrics that have plumped up the key performance indicators of financial service operatives both young and old.
It is back to first principles here. Money will be made, it will move and more often than not give a return when is deployed under the right instruments. The exact form and function of the coming mediums and channels is one I am following intently and you should too. Things just might get upended.