Farewell to a Frenzied Fintech Year
Spectacular downfalls of once-iconic leaders and banks and surges in AI and BNPL marked 2023. Brace for more in 2024.
Farewell to a Frenzied Fintech Year
Some years in business are more strikingly notable than others, often for the hard times that companies contribute to, or the serious conditions they must work around—a financial crisis, deep recession, pandemic, strong inflationary forces, high interest rates or war—and not for the innovation and progress that occurred. Yet 2023 will be remembered for its highs and lows without businesses having to deal with many of the aforementioned negative triggers. True, the United States is dealing with inflation and the Federal Reserve’s rate hikes to counter it, but by October headline inflation was cooling—good news—and the Fed is expected to begin cutting rates next year, but let’s not get ahead of ourselves.
In fintech, the year saw spectacular downfalls of once-iconic leaders (think FTX founder and now-convicted felon Sam Bankman-Fried and Binance’s ex-CEO Changpeng Zhao); a social media-driven bank run that toppled three banks in short order (Silicon Valley Bank, followed by Signature Bank and First Republic); the surge of artificial intelligence, invariably prompting fierce debate about its prospects and perils (e.g., could lenders be making decisions that are unintentionally biased, or is insurtechs’ ability to more accurately predict losses from climate risks going to accelerate climate migration?); the growing appeal of Buy Now, Pay Later services; and faltering efforts by the U.S. Securities and Exchange Commission to rein in the cryptocurrency industry—on track to finish 2023 with a bang—from what it deems to be no-holds-barred behavior (Just ask Coinbase CEO Brian Armstrong, who isn’t afraid to take on any regulatory battle while steering the crypto exchange to strong gains).
What follows are some of FIN’s favorite pieces that captured the players, pace and remarkable, if not at-times chaotic innovation that dominated the fintech industry, and how things stand heading into the new year. —Holly Sraeel and James Ledbetter