Global fintech and funding innovation ecosystem

The Rise in Big Tech and Fintech Credit

NCFA | Samuel He | Jan 13, 2021

Rise of Big tech and fintech credit - The Rise in Big Tech and Fintech Credit

As a Gen Z, technology has played a big role in my everyday life ever since I was young and now as a remote intern at NCFA, I’m excited to share some research and insights on Big Tech and Fintech credit markets.

Big Tech and its expanding dominance

Lending institutions such as banks and credit unions have traditionally been the chief sources of finance in most economies in the world, however large technology firms are uniquely positioned to capitalize on a technology-focused alternative to financial services. Their advanced AI and machine learning capabilities allow these companies to utilize the swaths of data that their user base generates to tailor prices, determine creditworthiness, and screen loans. Amazon’s e-commerce sales for example, reached a staggering $416.48 billion in 2020.   As online channels expand due to general trends and the global pandemic, they pose an   existential thread to traditional brick and mortar models. UBS analysts estimate that 75,000 brick-and-mortar stores could be forced into closure by 2026.

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Companies like Walmart have seen their supply-side economies of scale diminished by competing and efficient online marketplaces that operate with lower overheads forcing them to integrate more technology into their business model.  Walmart has already taken several steps in the Fintech credit direction. One is the creation of Walmart Pay, a payment app that enables shoppers to transact at the register via QR code. Other methods adopted include a prepaid card plan with Walmart MoneyCard and a money transfer service with Walmart2Walmart.

Global Alternative Credit Trends

As illustrated in the chart below, there has been a surge in popularity in Fintech and Big Tech credit – collectively known as alternative credit – reaching an estimate of 795 billion USD globally in 2019. While alternative credit has been on rise collectively, the data shows that global Fintech credit volumes have declined between 2017-2019 from an estimate of 410 billion to 223 billion USD.  One major factor for this decline is due to the greater regulatory developments in China. In the same period, Big Tech credit growth has surged at a more rapid pace than the previous years, rising from an estimate of 197 billion in 2017 to 572 billion USD in 2019.

P2P Lending and Fintech Credit in the U.S.

Interestingly while Big Tech seems to be the dominant player globally in recent years, Fintech credit is much more prevalent in the US, accounting for nearly 89% of the total US alternative credit. Research shows that the Fintech credit market in the US is primarily made up of P2P/marketplace consumer lending with investment coming predominantly from institutional investors rather than individual lenders.

Fintech credit describes credit activity facilitated by online platforms that are not operated by commercial banks. One popular form of Fintech credit is peer-to-peer (P2P) lending, where borrowers are matched directly with investors through a lending platform.

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Traditionally, one's FICO score has been the gold standard of credit bureaus in determining one's ability to open a bank account, obtain a loan, or get a credit card. Now, with the ability to process lots of data at high levels of efficiency thanks to machines, Fintech companies are creating more holistic creditworthiness rating systems that help alternative lenders better assess risks and serve up loans to a segment of the population that traditionally has been shut out of markets.

Prediction for Future

Given Big Tech and Fintech’s competitive advantages with machine learning and AI, I believe that they will play an inevitable role in the future of financial services. This type of competitive edge that Big Tech companies have make them ideally positioned to serve the role of a Techfin, a term coined by Jack Ma describing tech companies that provide financial services with a more customer & technology centric approach.

The COVID-19 pandemic has only exacerbated the paradigm shift in the financial technology space. Growing numbers of people consider the adoption of contactless payment as a basic need to prevent the spread of the virus, and I predict the rise of many forms of Fintech innovations like mobile wallets replacing physical wallets.


Given the size, resources and efficiencies of Big Tech and the increasing potential of Fintech, incumbent institutions are likely feeling the heat to re-align their products and services to benefit tech-savvy consumers across the board, not just us Gen Zs. Incumbents like Chase have already taken steps in this direction by investing heavily in their digital space to offer a more unified experience for the customer. As a passionate technology user, I am eager to see what the future has in store.


Fintech Confidential issue 3 cover 1 - The Rise in Big Tech and Fintech Credit

This article appears as a featured article in NCFA's digital magazine, Fintech Confidential (Issue 3 Dec 2020). Click to read the latest thought leadership, insights and trends about Fintech in Canada:

Checkout NCFA's digital magazine, Fintech Confidential (Issue 3, Dec 2020) --> here


NCFA Jan 2018 resize - The Rise in Big Tech and Fintech Credit The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

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