Nearly Half of Fintech Lenders Now See Regulatory Challenges as Top Concern

A recent survey of 100 fintech industry leaders found that 32 percent of respondents viewed regulatory challenges as the main threat to their businesses in the first quarter of 2022. For data collected between August and October, that number rose to 47 percent. The Fintech in 2022 survey was conducted by Alloy and Gartner Peer Insights.

Charley Ma, Alloy General Manager, said that before this year, regulators were more interested in big banks and financial institutions. Regulators “have moved a lot faster this year, for example, with crypto, and anything within crypto will touch fintech,” he said, according to BankingDive.

28 percent of survey respondents said that crypto was the most exciting thing going on in fintech next year, followed by 16 percent mentioning buy now, pay later. However, 58 percent said they were less hopeful about crypto this year than they were in 2022. Ma said that number would likely be even higher if the survey took place now, after the collapse of crypto exchange FTX.

Although public fintech companies have experienced cuts in their share prices, private fintech companies like Brex, Chime, and Stripe have had high numbers of workforce layoffs. However, only 3 percent of private fintech leaders expect to layoff more employees, and 81 percent expect to increase their workforce during the second half of 2022.

49 percent of respondents said they would focus on product development during the second half of the year, 35 percent said they would prioritize profitability, and 30 percent said they would focus on developing partnerships. Also, 40 percent predominantly target millennials while 37 percent typically target low-income consumers.

“This new, more cautious paradigm in fintech may mean that private firms are in good shape to weather a lasting macro downturn, should one come,” the report said. “At the same time, attitudes regarding bleeding-edge innovations like crypto appear to have cooled significantly following the speculative frenzy of 2021.