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Fintech was the most overused buzzword at Davos this year. The excitement and concern over the disruption by fintech startups was promoted by the world’s largest financial institutions. There was little to no representation from any fintech startups. The incumbents are excited by the potential of new innovations and are hopeful that regulators will control (Kill) startups that threaten their businesses.
Dutch Finance Minister Jeroen Dijsselbloem said on the same panel that European economies are far “too dependent” on the banking system, and regulators would welcome alternative providers of financing to consumers and small- and medium-sized businesses. “We need alternatives, and technology can help,” he said. “Regulators should never be at the front of technological development. Regulators should follow it as closely as possible, understand it and deal with financial stability and consumer protection. You don’t want to over regulate before you understand it.” Even new entrants were surprised at how quickly the changes brought on by technology became the dominant theme for banking discussions.
