Crazy fintech predictions for 2016

Crazy fintech predictions for 2016

Pascal Bouvier, newly installed as a venture partner with Santander Innoventures fintech venture fund, dusts off his crystal ball and peers into the not-too-distant fintech future.

"I was not predicting the future, I was trying to prevent it." Ray Bradbury

Without further ado, here is a list of wild, wilder and wildest predictions for 2016, all of which will prove me wrong I am sure:

1) Lending:

  • Defaults begin to spike up by mid 2016 and weak alternative lending platforms focused on consumer credit are exposed. The leading platforms consolidate their advance.
  • At least one lending unicorn sells after failing to IPO.
  • Alibaba and Amazon steadily grow their own SME lending initiatives.
  • More mature securitization comes to SME lending.
  • A mortgage lending startup brings delight to the broken mortgage lending process. New unicorn anyone?

2) Capital Markets:

  • At least one major exchange announces a Machine Learning proof of concept.
  • Banks and buy side actors finally learn how to collaborate together and agree on open standards around new technology stacks, data, interoperability, leading the way for breakthroughs with consensus ledger tech (see below)

3) Insurance:

  • Much like Banks in the past 5 years, most insurance incumbents remain asleep at the wheel allowing a multitude of startups to prosper.
  • At least 100 digital insurance startups get funded throughout the year.

4) Wealth Management:

  • Betterment sells to a large strategic. We all wonder if the sale price was below the latest valuation.
  • B2B wealth management startups are the "in" thing.

5) Consensus Ledgers & Crypto currencies:

  • Bitcoin trends down below $200 as the Chinese government cracks down on miners smooching off of cheap power (I need at least one crazy controversial statement!)
  • Some alt coins become memorabilia items.
  • Identity management startups built on consensus ledger tech break out.
  • Several countries well on the path to adopt and use their own crypto currencies.
  • Consensus Ledger focused startups experiment with property rights.

6) Payments:

  • As ApplePay breaks out, Apple decides to make a series of investments in the Payments space, forcing Alphabet and Facebook to follow suit.
  • Banks roll out their own wallet solutions, ensues a real digital wallet war for retail payment domination.
  • A few interesting cross border payments companies pick up steam, both on b2b and b2c - one may even use crypto rails.
  • Many "me too" payments startups close shop.

1) Valuations start to normalize - that is no further growth and slight decreases - and some investment terms become more investor friendly.
2) Financial Wellness or Financial Health becomes a HOT topic.
3) Strategic buyers (banks, insurers, asset managers) increase their partnership and M&A activity with fintech startups that failed to gain significant traction but have interesting technology platforms.
4) London consolidates its dominant fintech lead.
5) Silicon Valley investors cool off slightly to fintech. NYC VCs and new fintech funds pick up the slack.
6) Singapore builds up its status as SEA's fintech hub.
7) Regulators further adapt to a finserv/fintech sea change and become more flexible and open for business (one can always dream).
8) Following in the footsteps of their UK brethren, US bank regulators signal they welcome digital bank startup applications.

Alibaba secures an operating foothold in payments, lending and wealth management in Europe and the US, despite initial regulator skittishness.

By all means, add to the conversation. Which likely event have I missed? Which prediction seems far fetched or plain stupid on my part? Explain your own predictions of course.

Pascal Bouvier is an investor and fintech expert. He is a Venture Partner with Santander Innoventures, Santander Group’s global Fintech VC fund. Prior to joining Santander, Pascal was General Partner with Route 66 Ventures where he built and managed the venture arm of the firm into a top 15 global fintech venture investor by 2015. Pascal brings a wealth of experience as an operator having been an executive with large financial services incumbents as well as with high growth startups and post revenue SME’s in various industries.,. Twitter handle: @pascalbouvier

Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 January, 2016, 14:18Be the first to give this comment the thumbs up 0 likes

Great list.

Apropos your very first prediction, I totally agree: I'd recently tweeted that "Banks have drastically cut down on loans to SMBs. Online lenders don't need innovation in lending but in recovery of outstandings." (

Apropos "Banks roll out their own wallet solutions, ensues a real digital wallet war for retail payment domination.", well there are many bank mobile wallet solutions in India and I personally think one of them beats all TELCO and nonbank wallets hollow: HDFC Bank's PayZapp Ends My Bill Payment Woes

Hugo Cuevas-Mohr
Hugo Cuevas-Mohr - Mohr World Consulting - IMTC Conferences - Miami 05 January, 2016, 18:15Be the first to give this comment the thumbs up 0 likes

Since cross-border money transfers/payments is the space I follow closely I agree with you Pascal that both on the b2b and b2c space is where we are seeing a strong interest by NBFIs and certainly the blockchain is being explored by some interested parties. What can we expect in the p2p space?

A Finextra member
A Finextra member 05 January, 2016, 19:16Be the first to give this comment the thumbs up 0 likes

Big Money Laundering/ CTF loopholes exploited/ exposed .. Though I hope not, I see too many "weakest links" developing.

Third parties gaining API access to consumer bank accounts could open a Pandora's box - whole new, totally unprecedented chapter that we'll be discussing next year this time.