Tom Burnside is not only the CEO of LendingPoint, but he’s also an astute observer of FinTech at the macro level. We asked him for his thoughts on trends to watch in 2018, and this is what he shared:

Three important concepts loom large in the year ahead: consolidation, acquisition and credit-first. I believe we’ll see these ideas playing out in FinTech in 2018.

Consolidation

I believe that 2018 will be a year of continued consolidation due to the influx of money being invested into our industry. We will start seeing hybrid companies working both non-balance sheet loan origination and balance-sheet lending. Working that way allows a company to speed up and slow down as they need to–so long as they have the ability to manage the credit risks associated with owning a portfolio. I foresee there will be a lot more companies like LendingPoint forming soon within our space.

Acquisition

Companies will find, buy and bolt-onto to their business companies and companies adjacent to their market or product set with tools and services that customers want and need.  Acquisition allows for expansion without changing a company’s core product and service. It provides  an opportunity to expand at a greater speed than building from the ground up. This is imperative to keep momentum in the FInTech space.  2017 was a year filled with building, but I believe 2018 will be year filled with acquisition, driving a quicker and more efficient pace.

Credit-First

I believe that the rest of the industry will come around to a truth that we’ve believed from the day of our founding: A credit-first approach to lending is how you build a sustainable business.

There will be a transition from marketing-first origination only to credit-first balance sheet building at some pretty well-known names in the business. Marketing-first was built to prove there was actually a market out there and now being credit-first, should provide more predictive outcomes for investors and more opportunities to build sustainable and profitable businesses.