Predictions for FinTech in 2017

It’s now that time of year when we not only reflect on the year that was but also attempt the predict the future based on current trends. This practice is especially popular in the tech industry where there’s always excitement for what’s on the rise, what’s next, and who will get there first. With that in mind here are a few things we can expect from the FinTech industry in 2017:

More bank/FinTech partnerships 

In 2016 we saw JPMorgan Chase partnering with FinTech lender OnDeck and later launching their own incubator for startups. While those developments were the most high-profile embrace of the sector from a legacy institution so far, data suggests they won’t be the last. In fact a survey of financial services leaders recently conducted by The Financial Brand saw 29% of respondents noting their prediction that more bank-FinTech partnerships would be forged in the coming year. As Geezeo CMO Bryan Clagett told the site, “Consumers will take more control of their financial relationships and will look for digital tools for advice and insight. Banks will come to realize that FinTech is not a threat, but rather an opportunity, and while a focus has been on millennials, Gen X and Boomer segments will become increasingly important to financial institutions.”

Mobile P2P will continue to grow, outpacing the industry as a whole

Perhaps the hottest focus in all of FinTech right now is mobile. There’s good reason for that as smartphone penetration is hovering around 80% in the U.S. As a result Business Insider projects that mobile peer to peer (P2P) payments will start accounting for a greater share of P2P overall, reaching 30% — equating to nearly $175 billion in transactions — by 2019. In contrast the P2P payment market as a whole is only expected to grow modestly in that time. While many big institutions are now updating their apps in an attempt yo compete with online banks and payment services, perhaps this area more than any other is ripe for some major team-ups in 2017.

Some firms will strategically take OCC’s offer to become “special purpose national banks”

Just a few short weeks ago Office of the Comptroller of the Currency head Thomas Curry laid out his department’s plan to introduce national charters for FinTech companies. While there are still details to work out, it seems that this would ultimately give firms greater freedom to operate across the country while also increasing the amount of regulation placed upon them. Despite the fees that will likely be part of the deal, this could actually be a good investment for FinTechs of a certain size depending on their situation.

For example marketplace lender Lending Club, which has clawed its way into most but not all of the states in the union at this point, would benefit from having a national charter. More importantly an increase in oversight could help to earn customer trust and assure investors following an internal scandal that led to the departure of CEO and founder Renaud Laplanche earlier this year. That being said other FinTech firms seem likely candidates to take up the OCC’s offer as well. And, if the big guys don’t end up taking the deal, I’d expect some younger startups, like Able Lending, to give it a try in an attempt to make a splash. We’ll see.

2016 was a mixed bag for the FinTech industry. While plenty of companies overcame hurdles to achieve significant growth, others experienced some stumbles they’ve had to rebound from. With 2017 now on the horizon it’s time for companies to look beyond their past successes or failures and focus on the future. Whatever happens, hopefully the new year is a good one for FinTech.


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Apple Begins Rolling Out BNPL Platform Apple Pay Later

More than nine months after initially announcing plans to offer its own "buy now, pay later option, Apple has begun rolling out its new platform. With Apple Pay Later, customers will be able to finance purchases by paying them off over the course of six weeks. These short-term loans come with no fees or interest. Currently, the company is inviting certain (randomly selected) users to access the platform. Like with...

Credit-Building Tool StellarFi Raises $15 Million

A credit-building platform is adding to its coffers, announcing a fresh injection of funding. This week, StellarFi (previously known simply as Stellar) announced that it had closed a $15 million round. The Series A was led by Acrew Capital, while ATX Venture Partners, Trust Ventures, Dream Ventures, Interplay, Accomplice Ventures, Vera Equity, FJ Labs, Fiat Ventures, Gaingels, Kelmhurst, Oyster Funds, Hilltop Ventures, Permit Ventures, Kindergarten Ventures, J2 Capital, Socially Financed...

Rocket Companies Introduces Rocket Visa Card for Homebuyers

Rocket Companies — the parent company of Rocket Mortgage, Rocket Homes, Rocket Loans and Rocket Money — is now adding a branded credit card to the mix. This week, Rocket introduced the Rocket Visa Signature Card. Not only will the new offering integrate with Rocket Money but will allow cardholders to earn up to 5% back. With the Rocket Card, customers can earn 5 Rocket Rewards on every purchase they make....