There have been heated discussions about where our country is heading under the Trump administration since the presidential election ended. In particular, FinTech, a sector with increasing significance to the economy, is watching closely to figure out where the future lies for the industry.
An open internet environment, as many believe, is essential to the growth of FinTech companies. Democrats (Obama, Clinton) have been mostly in favor of net neutrality, while Republicans (Cruz, McConnell) have been opposed. While unclear what President-elect Trump will do, he has compared net neutrality to the defunct Fairness Doctrine and stated that net neutrality would allow parties to target conservative content on the internet. GOP lawmakers already introduced a bill this year to end net neutrality, a bill Trump would likely sign into law if passed. The fear of such consequences has led to uncertainty clouding the entire industry – which has the potential to slow down investing activities and drag us into the paradox of thrift. Others believe (like Peter Thiel) that net neutrality is an unnecessary regulation and would have limited impact.
On the other hand, some see ways for FinTech companies to benefit from the Trump presidency. For example, as Trump hopes to move student loans origination back to the private sector, more innovations and capital flows may be stimulated. Dismantling Dodd-Frank, reinstating Glass-Steagall and/or reducing power of the CFPB, can also boost performance of the industry – particularly FinTech lending and payments.
In either scenario, we believe innovation ultimately wins and opportunities in FinTech will continue.