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The Economist has just published a special report on fintech. According to the report, the fintech revolution will reshape finance by cutting costs, improving the quality of financial services, improving risk assessment, and creating a more diverse and therefore stable credit landscape.
The magical combination of geeks in T-shirts and venture capital that has disrupted other industries has put financial services in its sights. From payments to wealth management, from peer-to-peer lending to crowdfunding, a new generation of startups is taking aim at the heart of the industry—and a pot of revenues that Goldman Sachs estimates is worth $4.7 trillion. Like other disrupters from Silicon Valley, “fintech” firms are growing fast. They attracted $12b of investment in 2014, up from $4b the year before. Many of these businesses are long past the experimental phase, as our special report this week explains. Lending Club and OnDeck, two new lenders, have gone public; users of Venmo, a payments app, transferred $1.3b last quarter. In his latest annual letter to shareholders Jamie Dimon, the boss of JPMorgan Chase, warned that “Silicon Valley is coming.”
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