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The hubris of "fintech" is just so funny because it’s tech people looking at a 5000 year old sector that accounts for a double digit size portion of the economy

The hubris of "fintech" is just so funny because it’s tech people looking at a 5000 year old sector that accounts for a double digit size portion of the economy, run by the smartest and most ruthless people in the world and saying “You know what, I bet these guys are leaving a lot of money on the table” BNPL services are just the absolute epitome of this behaviour. Unsecured lending for consumption is a practice that is as old as the hills, it isn't a new thing. It's been tried millions of times before, it's not very profitable, and these firms are doing it at a massive scale. Affirm is one such example, and they aren't just losing money, their quarterly losses are greater than their total quarterly revenue! Once the credit rating in their portfolio starts to slip, (and it will, it happens every business cycle) the carnage will be incredible to see.

perl4ever 5y ago
I found out recently I could get an unsecured loan to buy a car. I'm not clear on whether this is a new thing. It wasn't cheap by new car dealer standards, but it was cheaper than other car loan lenders who do require a lien for security. Also cheaper than I can get on a HELOC. And although the name was weird and unfamiliar, it was a subsidiary of a bank I've heard of and not some "fintech" startup.
whimsicalism 5y ago
Yeah except for the fact that for most of that 5000 year history incumbents had an incredible advantage because they were literally hereditarily entitled to vast amounts of the financial system (centered around land back in the day)
WastingMyTime89 5y ago
> looking at a 5000 year old sector that accounts for a double digit size portion of the economy It’s a strange comment because modern banking is 400 years old and finance is a sector which has seen many innovations though its history. It’s even more amusing when you realise that PayPal, one of the biggest success of the dotcom era, is a financial company. Finance is a sector dominated by very large institutions with a vested interest in not shaking the boat. There is often plenty of money to be made just by being more efficient and selling cheaper services. The European neobanks are a perfect exemple of that.
- missedthecue 5y ago
  Fractional reserve banking is 400 years old. Fintechs aren't involved in that. Money lending is thousands of years old.

perl4ever 5y ago

I found out recently I could get an unsecured loan to buy a car. I'm not clear on whether this is a new thing. It wasn't cheap by new car dealer standards, but it was cheaper than other car loan lenders who do require a lien for security. Also cheaper than I can get on a HELOC. And although the name was weird and unfamiliar, it was a subsidiary of a bank I've heard of and not some "fintech" startup.

whimsicalism 5y ago

Yeah except for the fact that for most of that 5000 year history incumbents had an incredible advantage because they were literally hereditarily entitled to vast amounts of the financial system (centered around land back in the day)

WastingMyTime89 5y ago

> looking at a 5000 year old sector that accounts for a double digit size portion of the economy It’s a strange comment because modern banking is 400 years old and finance is a sector which has seen many innovations though its history. It’s even more amusing when you realise that PayPal, one of the biggest success of the dotcom era, is a financial company. Finance is a sector dominated by very large institutions with a vested interest in not shaking the boat. There is often plenty of money to be made just by being more efficient and selling cheaper services. The European neobanks are a perfect exemple of that.

missedthecue 5y ago
Fractional reserve banking is 400 years old. Fintechs aren't involved in that. Money lending is thousands of years old.