The Future of Fintech: According to Experts and the TWIF Community

If you’re reading this, it means you (almost) survived another Money 20/20, congratulations! 

Last year, we did a survey of over a dozen fintech experts as well as dozens of our community members on their outlook for fintech. Here’s a summary of what they said in the middle of 2023: 

One year later, we haven’t seen the IPO window open up, AI is still booming, Stripe bought a stablecoin company, and we’re about to elect a new President in the U.S. So how have their views changed one year later? Let’s dive in! 

The glass might be half full or half empty, depending on if you ask a community member or one of our experts. The overwhelming majority of respondents from the community survey were bullish, while the expert survey was a bit more skeptical with more than half of those surveyed giving neutral ratings and only 33% giving a moderately bullish rating. Some even gave the most bearish rating possible. 

As you can see below, while there was a lot of agreement between groups, Personal Financial Management had a large divergence in sentiment. Otherwise, both groups were most bullish on Business Financial Management, Compliance/Fraud/Cybersecurity, and Payments.

The sectors with the lowest scores were BaaS/LaaS, Neobanks, Crypto and Personal Financial Management (PFM low for experts but not community members).

With more regulatory eyes on financial services and the upcoming election, it’s no surprise that both groups were bullish on Compliance. And with the rise of AI, it’s no surprise that Fraud and Cybersecrity are up there as well.

Peter Renton, Founder of Fintech Nexus, said:

Adding to that, Liran Amray, formerly of Team8 and JPMorgan, said:

Community members and experts were in agreement. Both groups were most bullish on LatAm and North America, while most were bearish on Europe. Despite that bearish outlook, Europe received significantly more funding than LatAm did in Q3. 

They were also in agreement on company outlooks based on stage. Early stage companies received the highest number of bullish responses. With a number of mid to late stage companies that raised during the hype of 2021 coming up on tough decisions of possibly raising a down round, this agreement makes sense. Matthew Goldman of Totavi said he worries that we’ll see A lot more companies fail. He submitted his response a little over a month ago and since then we’ve seen companies including Tally, Tandym, and Lithuanian payments infrastructure provider Kevin shut their doors.

At the same time, one expert said one of the biggest surprises since last year has been how seed stage company valuations haven’t fallen. “They’re rock solid and too high.”

Dan Rosen of Commerce Ventures echoed that sentiment at the next stage:

When asked which 3 segments of fintech will see the biggest impacts from AI, every sector got at least 1 vote from community members, with Investing, Office of CFO, and Personal Financial Management getting the most votes. 

For experts, Crypto, Consumer Neobanks, Open Banking received no votes for the largest impact from AI, while Office of CFO, Insurance and Personal Financial Management received the most. When I interviewed Ken Lin, Founder of Credit Karma on the Fintech OGs podcast a few weeks ago, AI was something he was very optimistic about for the PFM space. 

For experts, the most overrated sectors were AI and Compliance. For community members, AI, BaaS, and Crypto were the most mentioned. 

When it came to underrated, experts said forms of payments (largely cross border) and accounting/taxes were most underrated. For community members, compliance, personal financial management, and various forms of payments (B2B in particular) were most mentioned. 

Despite being excited about the ways AI can impact our industry, both community members and experts are expecting a slowdown in AI over the next 6 months. And remember how we talked about mid to late stage companies facing tough decisions? Consolidation was another big theme mentioned by both experts and members.

Charles Birnbaum said:

AI was also a source of fear for both groups, particularly when it comes to advancements in fraud.

One anonymous expert said:

And of course, rate cuts are going to impact everyone from lenders to neobanks to insurance companies. There was disagreement on how quickly rates drop amongst our experts. While one respondent that wished to remain anonymous (though we know who they are) said they don’t expect rates to fall very fast, another said “we'll start the next super cycle with two rate cuts this year and four or more next year.”

Community member David Snitkof, SVP of Growth at Ocrolus, said:

With both experts and community members cautious and continuing to be cautious on crypto, the reemergence of the sector post FTX debacle was mentioned as the biggest surprise since our last survey. And with how deep and long the Synapse debacle was (and continues to be), that was also a big surprise for both groups. Sticking with banking and Synapse, the ledgering issues with Mercury and Evolve was a shock.

Josh Hosteler, Content Director at First Dollar said:

Here's a quick rundown of how things compare to last year: