Big Banks Will Show Fintech Who’s the Big Boss
JPMorgan Chase and other established players are no longer staying on the sidelines.
What to Expect in 2023:
The health of borrowers is the key concern for all of finance in the coming year. An optimistic view would be that inflation is quickly brought under control without interest rates rising too much higher; and any recessions will be short and shallow. In that world, only the riskiest borrowers will likely get into trouble. That, however, still spells losses and it’s the optimistic view!
The biggest banks with the strongest balance sheets — such as JPMorgan Chase & Co., Bank of America Corp., or BNP Paribas SA — should be able to take this scenario in stride. But even in this scenario, many of the younger fintechs that have expanded rapidly into consumer lending are likely to be in for a rough ride due to their greater concentration in riskier, now overextended borrowers.