Will Most Large FinTechs Become Banks?

As you might know, at MEDICI, we constantly look at data from 13,000+ companies, as well as what banks and FIs are up to. We also look at what is happening in the marketplace, and through our data combined with our knowledge and discussions in the market, we’ve made a few predictions. One of the predictions we made was that many FinTechs that grow would become banks. A few years ago, we had written an article about this very topic with four to five examples. But today, this trend has become even more established – around 17 FinTechs have become banks!

FinTechs have been historically focused on disrupting banks and displacing incumbents. The founders of most FinTechs had been inspired by other industries – such as transportation (Uber/Lyft/Grab), communication (WhatsApp & Skype), and Housing (Airbnb) – and were looking to disrupt the banking industry through their innovative, over-the-top products. They believed that they would transform the industry from asset-based value ...

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