Ask HN: Will Fintechs Die?

[markovian]

Or be absorbed by big techs ?

As we can see, large tech companies are turning into finance. Amazon has launched a full range of services. Google is on the same path. Uber began to manage the cash flows on its network itself.

It seems that big techs, which control consumers (and have become the operating systems of our lives) will end up managing everything themselves rather than relying on third party companies like fintechs.

Retail banks are dying, payment charges are falling sharply with the explosion of digital payments.

Big techs could very well share a same payment protocol and manage everything internally.

Don't you agree ?

[PaulHoule]

If you want to do what a bank does, legally, you have to either be a bank or work with banks. A lot of the pain and BS involved w/ banks are legal requirements such as Know-Your-Customer and Anti-Money-Laundering and if somehow activity moves away from banks, governments are going to apply those regulations to whatever replaces them. (e.g. you can't raise taxes in 2019, but you can collect taxes that people owe but not pay -- the pressures for controlling international payments are strong and increasing.)

I don't agree that retail banks are dying. Goldman Sachs is getting into consumer services such as the Apple Card, they have a savings account. I mostly bank at a vibrant regional credit union and I own stock in a regional bank which has done well financially me as an investor as well as for the community, investors, etc. There are many entrepreneurs in retail banking who are doing interesting things as well as large and non-traditional players. (e.g. Ally Bank, which used to be GM's car lending arm)

[BenAmesy]

I agree that Big Tech is getting into the Fintech space. Fintechs won't die though, it's actually a really good thing for Fintechs.

If you've developed anything innovative in Fintech where your product or service is used by banks or financial institutions, you need 1) connections in the banking industry and 2) a long runway rate as they're some of the worst customers out there.

Alternatively, Fintechs can now sell and work with Big Tech that are open to new ideas and efficiency. This can be either as customers or acquisition.

Banks have got to be shitting their pants right now, I imagine they'll be looking at acquisition to spur innovation (hopefully), but in either case, I welcome big tech into the Fintech arena.

[BenAmesy]

Wrote more about it here - https://medium.com/corl/why-bigtech-is-good-for-fintech-5fca...