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Consolidation, transparency, and the development of knowledge as currency

Cameron Stevens - June 03, 2016

business hand clicking fintech or financial technology button on

Recently, I had the pleasure of participating on panels at the LenditUSA conference in San Francisco and the ASU GSV Summit in San Diego. LenditUSA focuses on connecting the global online lending community while this year’s ASU GSV centered the discussion on futuristic learning technology. Despite differing objectives, the clear takeaway from both is that the Fintech and Edtech spaces share the same constant: continuous shifting and expansion. Within each space, there are key themes I’d like to share.

What is in store for Fintech?

Over the next year, we can safely expect to see increased consolidation of smaller players. Those that succeed will likely have roots in tech solutions focused on niche markets. Consolidation within this space will continue over the next five years.

Additionally, these players are courting a diversified capital base, creating stability in the sector. As the capital markets cool over the next few years, it will slow the trend of inflated valuations in small players.

Over the course of 2016, Fintech will see an increased focus on regulation with more rigorous underwriting requirements over the next five years. This needs to be balanced as the market place model will come under strain if the regulatory environment creates a slowdown in originations.  Above all, operational discipline, reliable infrastructure, and complete transparency are crucial as tremors in the global financial markets continue.

How do the UK and US markets differ?

As the industry matures, the differences between the US and the UK are becoming more distinct.

In Europe, investments in Fintech are growing much more rapidly compared to US figures. This is, in large part, driven by the UK’s endorsement of the Fintech space and the provision of regulatory support for expansion. The announcement that the FCA Innovation Hub will open a sandbox environment for Fintech companies demonstrates the government’s commitment to progressive players and the disruption of the traditional financial services space.

On the other side of the Atlantic, the continuous entry of new players is creating ‘frothiness’ in the market and inflated valuations. The inevitable fight for customer acquisition creates a battle of margins, which I anticipate will continue until the consolidation of several players is realised.

Edtech’s focus transforms knowledge into currency

In terms of Edtech, big data is one of the biggest game-changers we’ll see emerging over the next few years. With this trend taking centre stage in global hiring and management, it is hardly surprising that it will play a transformative role in the education revolution. That said, it will take time to trickle down to all the various players in education.

Another primary theme which emerged at the ASU GSV Summit is the role of lifelong learning in personal and career success. We at Prodigy see it day-in and day-out (facilitating learning is the core of our business), but it’s becoming apparent that successful individuals and companies believe the acquisition of knowledge should never stop. Democratization of education will be fully realized through Edtech platforms that make knowledge easier to access - making disruption inevitable.

Closing thought

One of the biggest takeaways from both conferences is the role of persistence. Although Fintech is rapidly expanding and shaking the established norms, market transformation simply does not happen overnight. Once the vision is clearly articulated, hard work and dedication are the key ingredients to ensuring these disruptions take the industry to new heights and not just new directions.


Learn more about Prodigy’s international MBA loan programmes here, or learn more about Prodigy's investor community here.


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