Putting the 'fin' back in fintech

The basis for fintechs: Tech should serve as a key enabler, not the sole driver of disruptive innovation.

Published Thu, Jul 16, 2020 · 09:50 PM

IN RECENT years, as an investor and fintech geek, I have marvelled at how tech has helped unbundle and rebundle financial services. The International Monetary Fund (IMF), in an April 2020 essay, wrote about how digital financial services, powered by fintech, have the potential to lower costs by maximising economies of scale, increase the speed, security and transparency of transactions and allow for more tailored financial services that serve the poor.

The scandal surrounding the German fintech company Wirecard has, however, cast a shadow on the broader fintech sector. Industry observers draw striking parallels with the meltdown of Enron in the United States almost two decades ago.

Fintechs, already having to navigate choppy seas churned up in the wake of the pandemic, are now bracing themselves for the fallout, amid a rising chorus of investors questioning the nosebleed valuations of unicor…