The Fintech Revolution Is Just Beginning

Last week, Bloomberg TV ran a story critical of the fintech lending space, citing major dips in the stock prices of three publicly traded lenders: OnDeck Capital (ticker: ONDK), LendingTree (TREE), and Bankrate (RATE). OnDeck shares have lost nearly 75 percent of their value since the company's initial public offering last year.

Investors are concerned about the marketplace lending business model: OnDeck ran into trouble finding buyers for its small-business loans, and the margins on the loans it did sell took a tumble. The Treasury Department is to release a white paper reviewing the marketplace lending space this week, stirring fears of looming regulation. The sudden resignation of LendingClub CEO Renaud Laplanche on Monday saw many decrying the promise of fintech.

Despite these ostensibly troubling signs, it's way too early to say that something happened on the way to the fintech -- or financial technology -- revolution, as suggested last week by a Bloomberg Gadly column. The media pulling the fire alarm on fintech is premature and potentially just grabbing headlines.

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The impact that fintech is making throughout our economy is still in its infancy stages. Fintech is really just about innovating and bringing solutions to the banking, lending and capital markets. The competition heating up in fintech is better for the consumer, as there are now thousands of startups trying to level the playing field. And it's not just startups. Big banks are also looking to innovate.

We are at a point where the space is large enough that there are exciting developments happening at large firms like JPMorgan Chase & Co. (JPM), yet small enough that there are still hundreds of undiscovered startups with groundbreaking new ideas.

JPMorgan CEO Jamie Dimon wrote this in the company's annual letter to shareholders last month: "Fintech has been great at making it easier and often less expensive for customers and will likely lead to many more people, including more lower-income people, joining the banking system in the United States and abroad."

Far from being a revolution that eats itself or never gets off the ground, fintech is in the early stages of a network effect revolution: as it brings in more and more people who had no access or inclination to use financial services, the market for fintech companies will continue to expand.

The most innovative companies in fintech will be at the Benzinga Fintech Awards on May 24 in New York.

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One of the finalists, CommonBond, which helps those with student loans refinance their debt, saves the average customer around $15,000. Not all of the 75 million millennials in our country have student loans, but imagine the added buying power if even a significant portion of them had an extra $15,000 to spare.

For many, that could be the difference between potentially owning a home and a lifetime of renting. That's the power of fintech: it gives the power financial services used to provide only to the wealthy and makes them accessible to all.

Companies like dough, inc. are teaching do-it-yourselfers how to invest wisely, which could help see a whole generation of people securely into retirement.

Then there are startups like SmartAsset, which break down some of the more opaque financial questions to the uninitiated, like, "How much should I pay for a home?" and "What should my credit card interest rate be?" These companies are helping people learn to take control of their finances at a time when about half of American adults don't trust financial institutions.

You can't count out those institutions, though. Remember that Chase was one of the first big players in the mobile banking app space, gaining 10 million users in just 2 years.

Don't write off the lending space yet, either. Companies like Credibly and Even Financial are committed to making secure loans to small businesses and individuals, fueling America's entrepreneurial spirit with capital. Credibly, for example, has funded over 6,000 small businesses with nearly $300 million in loans.

The earnings reports from the bigger marketplace lenders are troubling, sure. But there's a reason great financial advisors don't trade on emotion. You have to look at the bigger picture and take every factor into account. A few earnings misses aren't reason enough to run away from the most exciting financial development in decades.

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There is a young, powerful new generation of people ready to take their finances into their own hands, and hundreds of companies new and old ready to work with them. That's more than enough reason to be excited about fintech.

Jason Raznick is the founder and CEO of Benzinga, a financial news and data outlet in Detroit. You can follow him on Twitter @JasonRaznick, and follow @Benzinga for actionable trading news and insights. For more information on attending, sponsoring, or exhibiting a product at the 2016 Benzinga Fintech Awards, go to its website.