The Race to Become the Amazon of Fintech

The Race to Become the Amazon of Fintech

“Everyone is trying to be the Amazon of fintech.” The proverbial land-grab for customers, partners, eyeballs and pocketbooks is occurring across the financial technology ecosystem, from P2P lending to investment banking. Some firms certainly have major competitive advantages in their marketing strategy and product offerings, but the reality is that most of the firms in […]

The Race to Become the Amazon of Fintech

“Everyone is trying to be the Amazon of fintech.” The proverbial land-grab for customers, partners, eyeballs and pocketbooks is occurring across the financial technology ecosystem, from P2P lending to investment banking. Some firms certainly have major competitive advantages in their marketing strategy and product offerings, but the reality is that most of the firms in the industry vying for the spot of “top dog” will be obliterated by companies with better tech, better reach and better capitalization.

Machine Revolution

If Amazon’s distribution is sophisticated enough to ship you books or groceries by drone, why can’t the financial services sector figure out a way to automate processes that already involve binary code? Such rhetoric may sound somewhat obvious, but due to regulatory and cost hurdles many of the advances occurring in fintech today are extremely overdue. Luckily some of the best and brightest in the field are working to solve both the simple and complex and automate processes in everything from bitcoin transactions to multi-million dollar securities deals.

The imminent creative destruction that is pending in the industry is likely to touch nearly every segment of financial services. As it does, we are likely to see collateral job damage across the financial sector. Those that are able to position themselves in such a way so as to avoid the axe may survive, but the machines are coming. Some very smart people are worse than contrarian on this topic.

Achieving Scale & Finding a Beachhead

One of the ways in which Amazon was able to win was through advancing quickly down the learning curve. Amazon CEO, Jeff Bezos, was strategic in targeting books as his initial beachhead into e-commerce. Books held more SKUs than any other product category in any other retail industry. By establishing an online bookstore first, the company was not only able to achieve rapid scale with a very ubiquitous product but it also gave management the ability to learn a core competency that later allow them to easily enter many other markets.

Yes, Amazon achieved scale, but the company’s strategy allowed them to do much more. Their beachhead products and industry were so broad, they learned quickly how to deal with millions of transactions in a streamlined way. Remember, they did this on a day when the current e-commerce tools available to online shop owners were non-existent.

But fintech is a different beast. Unlike an online bookstore online lending and securities dealing includes other elements including compliance and filtering for deal quality. In the world of securities dealing achieving scale is difficult to do without dipping into the gutter. In other words, a chicken-and-egg conundrum exists for scaling private securities transactions. In order to reach significant scale in exposure, the quality threshold is often breached—quality is sacrificed for deal quantity.

In today’s world, most platforms are either too niche oriented in order to reach quantity or they try too desperately to be all things to all people. They lack a true beachhead. Like Amazon, these players need their proverbial “book” market to establish a source of regular cash flows that can be used to further build out a product or platform. Traction before totalitarianism is key.

Complexity & Compliance

The ecosystem of financial technology is inherently complex, particularly in areas of corporate finance. This complexity is further exacerbated by layering on compliance issues. In fact, some fintech products are solely geared toward maintaining a compliant environment. However, where there are pain and complexity, there is an opportunity for disruptive technology.

Disruption is occurring all over the fintech ecosystem. There should be some major writing on the wall for many industries about to be obliterated by the likes of robotics and blockchain (i.e. financial advisors and transfer agents to be more precise). While there are areas that require people-to-people interaction and some serious bedside manner (like corporate M&A and other capital transactions), the reality is that most processes and procedures can easily be automated away. Growth will come as we continue to take high-cost heavy lifting away from people, replacing it with the tools necessary to make faster, more efficient finance.

Growing into the Amazon of fintech is not likely to occur overnight. Industry growing pains and individual company collateral damage still need to occur. In addition, the industry itself is so vast and the service offerings so different that the path to a catchall fintech company (similar to Amazon in e-commerce and cloud) would not likely occur until after industry maturation, consolidation, including a great deal of industry mergers and acquisitions. However, a conglomerate with such disparate technology in such varied niches in fintech would be unwieldy at best. I imagine those that will survive the current fray as successful companies would be advised to keep their heads down and stay in their lane. Until we grow up a bit, focus will be the name of the game.

Author :

Nate Nead

Nate Nead is an investment banker focused on mergers and acquisitions for middle market companies. He helps companies raise capital, acquire, grow and ultimately sell for the highest price possible. He resides in Seattle, Washington. This does not represent an offer to buy or sell any securities.

The New FinTech

The New FinTech

When ? Jun 30, 2016 Where ? 8:30am – 12:00pm ET Dentons LLP Dentons, Avenue of the Americas, New York, NY, United States Description What next?! The ongoing FinTech ride has been like a Fast and the Furious street race – full of twists and turns. First FinTech is a major disruption, and then it […]

The New FinTech

When ?

Jun 30, 2016

Where ?

8:30am – 12:00pm ET
Dentons LLP
Dentons, Avenue of the Americas, New York, NY, United States

Description

What next?! The ongoing FinTech ride has been like a Fast and the Furious street race – full of twists and turns. First FinTech is a major disruption, and then it is the belle of the ball with banks lining up to be its dance partner. Now, the Lending Club speed bump has turned a lot of lenders into the Fast and the Curious. Where does the market go from here? What is happening behind the scenes that has helped FinTech to grow? How is FinTech approaching underwriting and risk management? Join us on June 30th in NYC as we examine these and many more questions with leaders of the online lending industry.

More information

 

Marketplace Lending + Investing

Marketplace Lending + Investing

When ? September 27 and 28th, 2016 Where ? New York Marriott Marquis Hotel, Who will attend? Bank Lending Executives (Consumer, Small Business, Mortgage, Credit Cards, Auto), Investment Fund Managers, Institutional Investors, Hedge Fund, Individual Investors, Financial Advisors, Venture Capitalists, Investment Bankers, P2P Platforms, Regulators/Government, Attorneys, and Technology/Service Providers. More information: http://www.americanbanker.com/conferences/marketplace-lending-investing/

Marketplace Lending + Investing

When ?

September 27 and 28th, 2016

Where ?

New York Marriott Marquis Hotel,

Who will attend?

Bank Lending Executives (Consumer, Small Business, Mortgage, Credit Cards, Auto), Investment Fund Managers, Institutional Investors, Hedge Fund, Individual Investors, Financial Advisors, Venture Capitalists, Investment Bankers, P2P Platforms, Regulators/Government, Attorneys, and Technology/Service Providers.

More information:

Event: The Future of Marketplace Lending After the Lending Club News

Event: The Future of Marketplace Lending After the Lending Club News

When ? June 21, 11:30am – 12:30pm (MDT) Where ? Video panel streaming online. What ? Live video panel discussion. Panelist : Panelists: Joseph Besecker, Founder & CEO, Emerald Direct Lending Advisers & Bo Brustkern, co-Founder & CEO, NSR Invest Moderator: Summer Tucker, Director of Client Success, NSR Invest More information: http://events.shindig.com/event/nsremerald

Event: The Future of Marketplace Lending After the Lending Club News

When ?

June 21, 11:30am – 12:30pm (MDT)

Where ?

Video panel streaming online.

What ?

Live video panel discussion.

Panelist :

Panelists: Joseph Besecker, Founder & CEO, Emerald Direct Lending Advisers & Bo Brustkern, co-Founder & CEO, NSR Invest
Moderator: Summer Tucker, Director of Client Success, NSR Invest

More information: 

Attendees for “Funds, Permanent Capital Vehicles and Other Resources for Marketplace Lenders”

Attendees for “Funds, Permanent Capital Vehicles and Other Resources for Marketplace Lenders”

Our event on June 9th titled ” Funds, Permanent Capital Vehicles and Other Resources for Marketplace Lenders ” was attended by 170 people from the following firms : Please reach out if you would like to collaborate on a future event organization. Assured Guaranty Corp. Bank of America Corporation Bank of America Merrill Lynch Cadwalader, […]

Attendees for “Funds, Permanent Capital Vehicles and Other Resources for Marketplace Lenders”

Our event on June 9th titled ” Funds, Permanent Capital Vehicles and Other Resources for Marketplace Lenders ” was attended by 170 people from the following firms :
Please reach out if you would like to collaborate on a future event organization.
Assured Guaranty Corp.
Bank of America Corporation
Bank of America Merrill Lynch
Cadwalader, Wickersham & Taft LLP
Citigroup Inc.
Credit Suisse LLC
Credit Suisse Securities (USA) LLC
Deutsche Bank Securities, Inc.
Funding Circle Limited
GlobalCapital
Guggenheim Securities LLC
Liberty Lending LLC
LoanStreet
One Zero Capital
Opal Financial Group
Rabobank International
Salem Lake Capital
TD Securities (USA) LLC
Thomson Reuters
UBS Investment Bank
Wanderlust Wealth Management
Waterfall Asset Management, LLC
Wells Fargo & Company
Patriot Bank
Cross River Bank
American Express
Intelligent Edge Advisors
Brooklyn Park Asset Management, LLC
Financial Times
Liberty Lending
Victory Park Capital
Mannatt, Phelps & Phillips LLP
Cadwalader
PeerformCiti
Equifax
KEC Ventures
Cooley LLP
Royal Media — Bank Innovation
W Associates
CommonBond
DebtwireGreenLine BDC
Lazard
Halman Aldubi Investment House
Deutsche Bank
DailyPay, Inc.
Oppenheimer
DRB Student Loan
Clocktower technology ventures
Rainmaker Global Business Development
LendIt
Barclays Bank plc
Credibly
Wales Capital
EFL Global
Citigroup
Global Debt Registry
MarktSync
Guggenheim
Tricadia Capital
Focus Capital Management
Applied Data Finance
Strategic Innovation Management
Lendrise Marketplace
Thomson Reuters
Unison Site Management
Riposte Management
PriceWaterhouseCoopers
Equifax
The Interface Financial Group
Goldman Sachs
Auriemma Consulting Group
Garmentë
Context Summits
CommonBond
iTechArt
500 start ups
Red Balloon Security, Inc.”
ModernLend
Herio Capital
deBanked
Cadwalader
The Wall Street Journal
Raiseworks, LLC

Please reach out if you would like to collaborate on a future event organization.

Stay tuned for our next events.

LendIt China 2016

LendIt China 2016

When ? Executive Tour July 12-19 Lang Di Fintech Conference July 17-18 Where ? No. 1388 Hua Mu Road Pudong, Shanghai, 201204, China Agenda Conference Highlights: • The largest conference featuring internet finance leaders from both China and the West • 2 action-packed days of learning, networking, and deal-making • 1,000+ decision makers including leading […]

LendIt China 2016

When ?

Executive Tour July 12-19
Lang Di Fintech Conference July 17-18

Where ?

No. 1388 Hua Mu Road
Pudong, Shanghai, 201204, China

Agenda

Conference Highlights:
• The largest conference featuring internet finance leaders from both China and the West
• 2 action-packed days of learning, networking, and deal-making
• 1,000+ decision makers including leading Chinese Internet finance executives, investors,
banks, government regulators, and technology providers
• Featuring interactive workshops, fascinating keynote presentations, new product
launches, expert panel discussions, a large exhibition area and VIP dinners/parties

More information

LendIt Europe 2016 with the P2PFA

LendIt Europe 2016 with the P2PFA

Where ? InterContinental London—The O2 Oct. 10-11, 2016 1 Waterview Dr London SE10 OTW, UK When ? October 10-11, 2016 Agenda: LendIt Europe 2016 in conjunction with the P2PFA packs more content and networking opportunities than ever before into two full days. This year’s conference features nearly 200 speakers, more than 50 thought-provoking sessions, and the […]

LendIt Europe 2016 with the P2PFA

Where ?

InterContinental London—The O2
Oct. 10-11, 2016
1 Waterview Dr
London SE10 OTW, UK

When ?

October 10-11, 2016

Agenda:

LendIt Europe 2016 in conjunction with the P2PFA packs more content and networking opportunities than ever before into two full days. This year’s conference features nearly 200 speakers, more than 50 thought-provoking sessions, and the largest expo hall in Europe with over 100 exhibitor booths.

More information: