There’s some speculation that we’re in a bubble and fintech companies are being overvalued. But I don’t think we’re in a bubble, and the valuations landscape is nuanced and young. For starters, the financial market is just too large — it’s worth more than a trillion dollars. And this year alone, banking and security institutions will have spent $485 billion on IT. We’re just at the beginning of innovation, and there’s immense potential for growth. The banks are creaking under the weight of old legacy systems. They just can’t evolve fast enough alone; they need to collaborate with and buy into fintech companies in order to successfully compete in the new digital landscapes. We saw this trend of collaboration between banks and fintech entrepreneurs emerge in 2010 with the FinTech innovation lab in NY, which has now expanded to include labs in London and Hong Kong. Financial service firms like Sberbank of Russia and Spanish bank BBVA have also begun to create their own VC funds to fund fintech companies. Sberbank and BBVA have both committed $100 million — a clear sign of maturation within the market. Then there are the “finsurgents,” who won’t provide services for the banks but will look to disrupt and become their competition.

http://venturebeat.com/2014/10/04/are-we-in-a-fintech-bubble/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Venturebeat+(VentureBeat)