2021 in quotes: Part 1

The backdrop of Covid was ever-present in 2021 and wrought a significant impact on the world of fintech, like it had the year previous.

That said, the world of fintech got on with the day job, innovating, fundraising and disrupting. In fact it was a bumper year.

The array of the most memorable quotes in the first six months of 2021 below reveals an industry back to its combative and trailblazing best.

“If consumers invest in these types of products [crypto], they should be prepared to lose all their money.”

The rise of crypto continued to be a big trend last year, with the likes of Revolut and Checkout.com appointing specialist crypto executives to stay abreast of the tech.

But the crypto juggernaut has been beset with criticism, with some lambasting it as too high risk of an investment.

The FCA explicitly highlighted the risk, saying: “Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors' money.

“If consumers invest in these types of products, they should be prepared to lose all their money.”

JP Morgan Chase should “be scared shitless” of fintech

The rise of fintechs has presented a daunting threat to incumbent banks over the years. But it’s rare for the CEO of a major bank to publicly express their concern.

Not though Jamie Dimon, the outspoken CEO of JP Morgan Chase, who made his fear clear for all.

During a conversation about the high valuations of fintechs, Dimon said: “ “I gave to the management team, my whole operating committee, a little deck that showed Visa $500bn, MasterCard $350bn, PayPal $220bn, Ant Financial $600bn, Tencent $800bn, Alibaba a trillion dollars, Facebook, Google, Apple, Amazon.

“You can go on and on, but absolutely we should be scared shitless about that.”

“I don’t think I was any different, so I was really struggling [with my mental health]."

Amid Covid, and the rise of WFH, mental health became an important topic in the industry in 2021, with fintechs providing initiatives to help staff manage their health.

It was perhaps a surprise, but a welcome one at that, when Monzo founder Tom Blomfield spoke about his own battle with mental health, as he exited Monzo.

Blomfield said: “I think [for] a lot of people in the world — and you and I have spoken about this — going through a pandemic, going through lockdown and the isolation involved in that has an impact on people’s mental health.

“I don’t think I was any different, so I was really struggling. I had a really, really supportive exec team around me and a really supportive set of investors on board and I was really grateful that when I put my hand up and said, ‘I need help,’ they were super receptive to that."

Read more: Tom Blomfield departs Monzo

“The lack of focus on essential revenue-generating products, and the reluctance to incentivise customers” is a cause of Monzo’s troubles.

The debate around fintech’s balancing growth at all costs and profitability continued to rage in 2021, particularly given the financial impact wrought by the pandemic.

Analyst Katherine Long, a banking analyst at GlobalData. said parallels could be drawn between the sudden demise of Australian neobank Xinja, and the struggles of Monzo.

She added: “Xinja did not prioritize early on, trying to create a sustainable future with revenue-generating products, and it was too late when it finally dawned that it needed personal loans and wealth services instead.”

“Don’t worry, we’ll never have anything like 2008!”

The devasting impact of Covid caught the world largely unawares, fintechs including. LendInvest founder Christian Faes underlined the seismic impact the pandemic has had on fintech.

Faes said: “People started questioning how alternative lenders would deal with a crisis and I’ve spent the last 12 years telling people: ‘Don’t worry, we’ll never have anything like 2008!’ and now we’ve had this, which throws all models and scenarios out the window.”

“We all have a responsibility to take action to encourage diversity and help advance the role of women.”

Fintech is an industry that is particularly open to the charge of having a dearth of female leaders and board members.

Likewise, there is a lack of senior female representation of those that are funding fintech, a particular concern for Judith Hartley, CEO of British Patient Capital, who spoke ahead of International Women’s Day.

Hartley said that institutional investors have an important role to play in encouraging managers to develop diversity within their organisations.

“We believe its [Open Banking] true potential is only likely to be realised if the high street banks are positively incentivised to participate.”

Whether big banks see open banking as an opportunity or a threat has been a long-standing debate in fintech.

Tide CEO Oliver Prill, for one, bemoaned the slow uptake of open banking and called for a paywall around open banking data.

“Open Banking needs to become a business opportunity, not a threat, for the large banks. We believe there is a whole level of data that the large institutions could make available to companies like Tide, for a modest fee,” he said.

“ Revolut will have to get into asset management. There are no plans at the moment but you cannot avoid it.”

Neobanks have continues to branch out offering new services, fending off competition from upstarts and looking to improve their bottom lines.

Revolut chairman Martin Gilbert said moving into asset management represented the “low-cost option” for Revolut.

He added: "As the next generation inherit money, they will definitely not go to the incumbents. There will be a massive move to the Revoluts of this world. If we went into asset management, we would be a serious player in the market."

“This [buy now, pay later] is still at a kind of inception stage.”

The rise of Klarna and its rivals continued apace last year, with more than 17 million UK customers have now used a buy now pay later (BNPL) company to make an online purchase.

Despite critics saying it leads to users easily ending up in debt and tougher rules are needed, the industry itself says it is just getting started.

Speaking at the AltFi Festival of Finance, Alex Marsh, head of Klarna UK, pointed out that roughly just one per cent of consumer credit was transacted through BNPL.

He said: "This is still at a kind of inception stage really, albeit we see 15m UK consumers have used Klarna. There is so much scope in terms of, kind of, growth in popularity."