If you were thinking of moving from a large established bank into a smaller and scrappier fintech, you may have been dissuaded by events of the past few months. As technology stocks have plummeted and VC funding has dried up, fintechs from Robinhood to Klarna have cut jobs alongside crypto firms like Coinbase. Even if you get through the door, you may not stay there, and the chances of making money on stock via an IPO look more remote than ever.
This doesn't mean you should give up on the hope of a fintech job altogether, though. In a massive new deck to inaugurate coverage of the EMEA payments and fintech sector, Credit Suisse lays out the bull case (alongside the bear) for the fintech ecosystem, the top publicly listed names, and the enormous array of private companies by market area.
Why fintech jobs aren't dead
While the fintech sector has been hit by the perfect storm of war in Ukraine, rising inflation and a technology bear market, Credit Suisse says there are still valid reasons to think that the sector has growth ahead.
Much of the fintech industry is about payments and the global payments industry is enormous. It's expected to grow at a CAGR of around 10% this year and next. Online and offline payments are expected to blur, creating potential for large "omnichannel" players. Markets in Eastern Europe, Africa and Latin America are predicted to catch-up on the move away from cash to cards. Highly manual B2B payment systems are being digitized; the overseas remittance market is being disrupted by fintechs like Remitly and Zepz; peer to peer (P2P) payments (eg. digital transactions between friends) are rising. And growth of the entire system is being fuelled by rising online shopping eCommerce.
The best listed fintechs in EMEA
Credit Suisse's analysts have a few listed fintechs they recommend more than others to investors. While they're not in the business of making employment recommendations, it's fair to assume that fintechs with a sound business model and rising share price will also be good places to work.
Some of their favourites in Europe are: Ayden, a Dutch payment company that allows businesses to accept e-commerce, mobile, and point-of-sale payments; Nexi, an Italian bank specialising in payment systems; Wise, an international transfer service and 'neo-bank;' Edenred, a B2B payments provider which began in France; and Network International, a company that provides technology-enabled payments solutions to merchants and financial institutions in the Middle East.
How to think about fintech
The fintech industry isn't just about payments, but it is a lot about payments. Credit Suisse's analysts depict the landscape using the following chart. If you work in the fintech sector, you could be located in anyone of these squares.
Source: Credit Suisse. P2P=peer to peer. APM=alternative payment method. LPM=local payment method. AISP=Account Information Service Provider; PISP=Payment Initiation Service Provider; A2A=account to account payments.
Needless to say, most fintechs are not publicly listed companies. The fintech sector is awash with private companies, some of which will succeed and some of which will not. Many will merge. Based on the chart above, Credit Suisse analysts identify the following top private fintechs in the payments space. The list is EMEA-focused, but includes some global players. Credit Suisse isn't commenting on their viability, but the chart below shows the top players by area right now.
EMEA-focused payments and payment related fintechs
Source: Credit Suisse
Needless to say, there are plenty of other players in the fintech space. They include: payment facilitators like PayPal, Square and Stripe, payment software platforms like BlueSnap, Mindbody, Lightspeed Commerce, and Shopify, and payment processors like SumUp. There are B2B payments companies like Divvy, AvidExchange, Expensify, Veem and Tipalti. There are buy-now-pay later services like: Affirm, Afterpay, Klarna and Splitit. There are APIs like: Salt Edge, TrueLayer, Nordigen, Flinks, Yodlee, Yapily, Stripe, and Plaid. There's also a broad of array of neobanks (defined by Credit Suisse as "a technology platform that offers financial services, built upon a foundation of a checking account and affiliated debit card"), as shown in the slide below.
Top fintechs: The neobanks
Source: Credit Suisse
The neobank sector is also evolving its own ecosystem, though. Credit Suisse says banks in this category are working with their own collection of partners. These include: Socure, Ally and Persona for KYC and compliance; Plaid, Fincity, Tink and Truelayer for API connectivity; Atomic, Pinwheel and Fintech for payroll account collection; and companies like Moov, Treasury Prime, and Synctera for the middle layer.
However, Credit Suisse's analysts also note that neobanks are rarely profitable, pointing out that Forbes predicts that less than 5% of all neobanks will turn a profit in 2022. If you're tempted by a neobank, therefore, you might be better off working for a fintech within a large established bank instead.
Big tech companies moving into fintech
The other alternative is to work for a big technology firm moving into the fintech space. Credit Suisse's analysts note that Alibaba (Alipay) and Tencent (WeChat) pioneered big technology firms' move into fintech and are now moving into SE Asia to compete with Grab and Go-Jek. Among North American companies, Apple has Apple Pay, Apple Cash and Apple Card (with Goldman Sachs) and is thought to be developing its own payment processing infrastructure. Amazon is building a consumer payments ecosystem in-house. However, Google scrapped its plans to launch Google Plex checking accounts in late 2021, suggesting that even fintech jobs under big tech umbrellas are not entirely secure.
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