2015 Predictions


OK, I’ll admit it. I’m already over all the New Year predictions…. I’ve read thoughtful predictions that contradict themselves, such as ApplePay will not succeed (or that it will), so I’ve decided not to make a list of predictions.

What I’ll predict, however – pretty confidently – is that the year 2015 will bring a lot of exciting developments in FinTech.

It’s been difficult to be upbeat lately, with the negative news coming from the Middle East, the slowdown of European economy (and rise of the extremist parties there), hacking and security incidents, the chasm between left and right in the US.

But I’ve been reading Abundance, the book by founder of the X Prize, Peter Diamandis, co-authored by Steven Kottler, who wrote The Rise of Superman, on the science of high performance sports (and concept of entering a ‘flow state’).


One key take-away from the book was the inbuilt bias we have to see risks, and to focus on negative events, which drives both media (since we tend  to read bad news more than good news) and influences everything from politics to career decisions.

For instance, companies like LendingClub had successful IPO’s, and innovations like Apple Pay are unveiled in 2014, yet instead of focusing on the positive, VentureBeat publishes articles like “Are We in a FinTech Bubble?

Just because something like financial services technology is doing well as industry, doesn’t mean we need to be looking around the corner for bad news to come. Speaking personally, I’m excited to be living in such interesting times in San Francisco:

“We’re living through a tech revolution. We get to work with the most exciting companies in the world..” (Michael Grimes, Global Head of Tech Banking quoted in New York Times article of 2014)

During my time at the 2725 Sand Hill Road offices of Morgan Stanley, I was glad to interact, even briefly – since the bankers are always busy – with its pantheon of talent, such as bankers Dave Chen, Paul Kwan, Paul Chamberlain and Andy Kearns.

Returning to predictions, will ApplePay be successful in 2015 or not? I do think so, but as I’ve said, I believe we have a tendency to focus on winners vs. losers, and I really don’t think that’s the most important question of the new year (or even FinTech).

A16Z’s Benedict Evans was spot on last year calling for an end to the debate over whether iOS or Android will “win.” I think 2015 will be an amazing year for FinTech, whether ApplePay achieves rapid growth or not, is my prediction.

What excites me? As someone who worked early on in my career launching an online bank in the UK, I’ll always be looking to see what startups will be doing, but the ‘FinTech bubble’ article in VentureBeat gets it wrong, when it says since Millennials do not trust Banks, therefore startups will be favored to win over the incumbents in the long term.

Give me a customer-obsessed, strong value proposition incumbent – such as Vanguard or BlackRock – that has completely revolutionized investing, disrupted industry cost models, and create low-cost, superior investment products, anytime.

Vanguard      blackrock

I’d gladly do business with these incumbents – versus FinTech startup like Wonga, a much-hyped UK peer-to-peer lender that charges high interest rates to low-income borrowers…. and has been criticized by everyone in the press, even the Church of England, for what it does to those who are least advantaged in UK society.


Back in the US, Silicon-Valley’s Personal Capital is an innovator in wealth management, like Motif, plus I was impressed by CEO Bill Harris’s talk at The Future of Money in San Francisco last month.

But I was surprised by its hyping $1B in AUM after five years in business. Seriously? Morgan Stanley’s star advisors like Mark Curtis and Greg Vaughan manage $27B and $14B+ (see Barrons report) while the Firm manages $2 trillion for its clients. I do wonder if some of the startups will achieve sufficient scale. Their value proposition and execution need to be compelling.

Turning to lending, given the momentum from last year IPO of LendingClub and OnDeck, I will be keeping an eye on the plethora of interesting peer-to-peer lenders trying to make things better for people and businesses who need credit.

I’m a fan of Prosper, that show vision and execution, going after a new market, and trying to deliver something demonstrably better, through its pricing, product innovation and UX.


While I also respect how Prosper’s marketplace has made $2B in loans, I like even more its message of having empowered 250,000 borrowers, through better rates than banks and increased transparency. Take that, Wonga!


As for SoFi, based in the Presidio section of the city (right by LucasFilm’s offices), I like how they began as a way to reduce the interest rates paid on student loans by leveraging the power of alumni to give people a better deal. To me, it’s a solid innovation like affiliate marketing, when places like MBNA, a former consulting clients of mine, signed people up for credit cards based on  their membership in groups, passing on the savings derived from lower default rates and acquisition costs.

Today, SoFi is expanding into mortgage lending. While in US, mortgage rates are low now, just as gas prices have swung from high to low over the last two years, I think SoFi is smart to go after the huge mortgage market and diversity from student loans.

What else will be exciting in 2015? Workflow and connected services have my vote. I’ll address this in detail in a future post, but everything I see points to a more API and app-centric world of financial services beyond anything we’ve seen to date.

Here’s a glimpse… Last month, The Verge announced WorkFlow as one of the most exciting new apps to appear in the App Store. Essentially, it enables you to create customized workflows, using a simple drag-and-drop interface, so that you don’t need to follow repetitive, multi-step processes for multiple apps anymore, among other things.


Take the example of texting someone to let them know when you’ll be home. Using Workflow for iOS you can create a workflow to: 1) Open the Maps app; 2) Use app to see how long it will take for you to get home; 3) Open up your Messaging App (or email) and then text or write saying, “On my way. Be home in xx minutes” You can run it anytime using a single tap on your phone.

The possibilities are endless. The above use case is a simple example, but there are many in FinTech I can envision, i.e. you don’t want to open the online banking or brokerage app on your phone, but would like to check something, without multiple steps, using your fingerprint authorization and getting a quick summary of your balances and YTD time-weighted return.

Workflow screen shot

I sense innovation coming here, especially as providers like Yodlee, Intuit and others continue their focus on API’s and enabling developers using financial data. Using API’s and workflow, I see lots of cool solutions to be envisioned and built.

Here’s to an exciting future we all watch unfold in 2015!