Fintech thrives on incumbent bank inefficiency
The speakers argued that massive fintech valuations in Europe and emerging markets are driven by the extreme inefficiency and high fees of legacy regional banks.
The argument
Companies like Revolut and Nubank succeeded because incumbent banks in their respective regions were slow and charged high fees for basic services like foreign exchange and cross-border transactions, whereas US banks are relatively more efficient.
The thesis, stress-tested
✓ What validates it
- ✓Continued market share gains by digital banks in Europe and Latin America
- ✓Successful launch of lending products by major fintechs
▸ Risks discussed
- ▸Fintechs face regulatory hurdles as they transition to full banking licenses
- ▸Incumbents eventually lowering fees to compete
Hear it yourself
"I'm telling you the answer, and the only question is how much of it do you wanna buy at that price. So one thing we can't get wrong is that, Harry. Is that a wise move? He's leaving a lot of room for markets to move in between that. That's why you normally leave it, obviously, as close as you can because you don't want an Iran, Israel, a Broadcom moving markets, and then putting you in a precarious position. It feels unwise, but Elon is a master, so I'm I'm not gonna. Yeah. I mean, calling someone unwise is about two days away from becoming a trillionaire is a big call, Harry."
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