The Winners and Losers in Fintech in 2019

As we approach the end of the 2019, it’s a good time to look back and see who won and lost—or more appropriately, who’s winning and losing—in the fintech world.

The Winners

Goldman Sachs. The Vampire Squid took a few lumps this year with reports of $1.3 billion in loan losses (over a roughly three-year period) in its Marcus unit and accusations of bias in setting credit limits on the new Apple Card, but those were minor speed bumps on Goldman Sachs’ path to fintech success in 2019.

While many mid-size banks struggle to gather (and retain) deposits, Marcus ended 2018 with roughly $35 billion in deposits and by October had grown that to about $50 billion.

The Losers

Robinhood. With 10 million accounts (200,000 of whom signed up for fractional share trading on the first day it was announced) and a $7.6 billion valuation, Robinhood must be on the winners list, right? Wrong.

The company had a couple of missteps this year:

  1. botched attempt at launching a checking account (which, granted was actually late 2018). After announcing a checking account with market-leading interest rates and no fees, it turned out that the account wasn’t insured by the SIPC. After being mocked by the fintecherati for being nothing more than a money market account, plans for the checking account were shelved.
  2. The”infinite money” glitch. A glitch in its system allowed users to trade stocks with excess borrowed funds, giving them access to what amounted to free money.

Paradoxically however, another reason why Robinhood is the big loser this year is due to its success.

Full Article: The Winners And Losers In Fintech In 2019