This week we hear from Fortune, American Banker, Recode, and more.
Fortune covered Peter Thiel's recent graduation speech at Hamilton College, wherein Thiel talked about his time at PayPal and made the following comments that directly relate to banking and fintech:"We had a young team. When we started, I was the only person over 23 years old. When we released our first product, the first users were simply the 24 people who worked at our company. Outside there were millions of people working in the global financial industry, and when we told some of them about our plans we noticed a clear pattern: the more experience someone had in banking, the more certain they were that our venture could never succeed.
They were wrong. People around the world now rely on PayPal to move more than $200 billion every year. We did fail at our greater goal. The dollar’s still dominant. We didn’t succeed in taking over the whole world, but we did create a successful company in the process. And more importantly we learned that, while doing new things is difficult, it is far from impossible."
In two paragraphs Thiel captures the hyper-idealism of fintech startups as well as the risk aversion of traditional banks.
Bryan Yurcan wrote about the development of fintech + bank partnerships in his piece, "What Banks and Fintech Need to Ponder Before They Partner." Yurcan quoted Aaron Fine, a partner at the consultancy Oliver Wyman Group, who says that banks and fintech companies should leverage each other's strengths. "Very rarely do you get someone with the ability for creative thinking on one side of their mind, and on the other the aptitude for producing 1,000-page regulatory documents."
Recode recounted how Charlie Scharf, CEO at Visa, wants PayPal to quit encouraging users to pay with their bank accounts because it takes potential income away from Visa. Scharf says that if PayPal doesn't quit their behavior they might "go full steam and compete with them in ways that people have never seen before."
SparkLabs published their fintech industry report for 2016: