Have you ever played a game called Fintech Hot or Not? There are no right or wrong answers, you just yell out, “hot” or “not” in response to a fintech trend. The game works best when played with a captive, diverse audience, so I used the participants in my recent FinovateEurope Future of Fintech panel to gather their thoughts on a range of fintech trends.
Included in the panel were Radboud Vlaar, Founder and managing Partner at Finch Capital; Oliwia Berdak, VP & Research Director of Financial Services at Forrester; and Sam Kilmer, Managing Director of Fintech Advisory at Cornerstone Advisors. Ronit Ghose, Global Head of Banking, Fintech, and Digital Assets at Citi Global Insights was also in the panel discussion, but was not able to participate in the game for legal reasons.
In this version of the game, I asked the panel members if a trend was hot (or not) and I also asked if they would invest (or not) in a startup specializing in that trend. That’s because not only are some of the hottest trends not worth backing, but also some of the least popular themes in fintech may turn out to be the most profitable.
Below is the summary of the panel’s thoughts on what’s hot, what’s not, and what’s worth investing in.
Hot or not
Hot
- Web3
- DeFi
- Stablecoins
- Quantum computing
- Edge computing
- Wholesale Central Bank Digital Currencies (CBDCs)
- Buy now, pay later (BNPL)
- NFTs
- Digital Identity
Not Hot
- Special purpose acquisition companies (SPACs)
- Retail Central Bank Digital Currencies (CBDCs)
Mixed
- Metaverse
- Super apps
- Voice banking
- QR code payments
I expected more mixed reactions on BNPL, simply because there are so many companies leveraging this technology, and many are facing scrutiny for evading laws and encouraging consumers to take on too much debt.
Additionally, I was surprised at the very clear split between retail and wholesale CBDCs. Retail CBDCs, those designed to be available to the general public, were very clearly “not hot.” Instead, panelists were in favor of wholesale CBDCs, which are designed to be used among financial intermediaries.
As for trends in the “mixed” category, I would have expected both the metaverse and super apps to be labeled as “hot.”
Invest or not
Invest
- Edge computing
- BNPL
- Digital identity
Not Invest
- Metaverse
- Super apps
Mixed
- Web3
- DeFi
- Stablecoins
- Quantum computing
- SPACs
- Voice banking
- QR Code payments
- NFTs
To be clear, the panelists were not putting down any money, but they were still cautious when deciding whether or not a trend was worth investing in. Each panelist was decisively not interested in the metaverse, web3, or super apps. They did, however, choose edge computing over quantum computing. And to my surprise, they were mixed on whether or not DeFi was worth the investment.
If you attended FinovateEurope, you can watch the full panel discussion in the on demand content section of the FinovateEurope ConnectMe platform for a limited time.
Photo by Fabio Ballasina on Unsplash