Kevin Roose reports that “financial start-ups—known collectively as ‘fintech’—are spreading like kudzu, each with a different idea about how to usurp the giants of Wall Street by offering better services, lower fees, or both”:
Part of the reason the tech world is interested in finance is the sheer amount of money involved—financial services is a $1.2 trillion industry, and U.S.-based fintech start-ups raised an estimated $1.3 billion last quarter alone. But banking is also a prime candidate for disruption because, like much of the old-line corporate world, it tends to run on bloated, creaky technology. Even something as simple as applying for a loan can take weeks or months, thanks to the sheer number of human hands such transactions pass through. And, since each intermediary wants a cut, fees are everywhere. Undercutting big banks and speeding up processes might not be as sexy as, say, creating the next Snapchat, but it’s low-hanging fruit for techies who want a way in to a lucrative market. After all, today’s megabanks are really just bundles of particular, loosely related services cobbled together by years of acquisitions and market consolidation. If those bundles can be broken apart, the start-up world’s revolution looks a lot more plausible.
The Dish 