Google became a licensed mortgage broker lt week after launching Google Compare, which allows people to compare lending options after plugging in their credit score, down payment size and property value.
The new venture by the Internet titan is the latest in fintech (a portmanteau for financial technology), which has Silicon Valley testing the waters of the financial services market.
Antony Jenkins, former CEO of Barclays, predicted last week that the "unstoppable force" of technology will lead to a number of "Uber moments" over the next decade that will greatly disrupt banks, according to The Guardian.
More than 50 fintech startups are now valued at more than $1 billion, and the rise of automated wealth advisers like Wealthfront and Betterment (both approaching $3 billion in assets under management) has led traditional investment firms Charles Schwab and Vanguard to launch competing programs, The Economist reported.
Lending Club, which facilitates peer-to-peer loans, is expected in 2016 to be doing well over $1 billion a month in credit. It's success has Stanley Pignal, The Economists banking editor, declaring that the website is to banks what Airbnb is to hotels.
Few sectors of the financial industry are safe, Pignal says.
"2016 will be the first full year in America where companies will be able to 'equity crowdfund,' giving (small) shareholdings to backers wanting to invest perhaps just a few dollars," Pignal said. "The money-transfer business is gradually being wrested from banks and specialists like Western Union, which offered uncompetitive exchange rates: nimble online operations like TransferWise are growing fast."
The new startups are getting government help, too.
Contrary to increased pressure for stricter regulation, the Financial Conduct Authority is launching a regulatory sandbox in the spring, allowing "companies not currently authorized by the regulator to do business in the financial services sector" to test new products and services within this sandbox without having to apply for full-scale licensing, according to Forbes magazine.
Forbes writer David Prosser notes that cost of compliance and regulation is currently the biggest barrier for fintech entrepreneurs to enter the industry.
Silicon Valley is competing for Wall Streets turf, but according to The Wall Street Journal, young entrepreneurs are coming to realize the financial industry is a more formidable opponent than they thought a symbiotic relationship could be their best bet. "The lenders can provide financial startups with capital as well as legions of depositors and expertise in dealing with regulators," the Journal reported.
"The classic narrative is the Silicon Valley firebrand whos taking on the system," Matt Harris told the Journal, arguing that in finance, "thats just not going to be a winning narrative."
The new venture by the Internet titan is the latest in fintech (a portmanteau for financial technology), which has Silicon Valley testing the waters of the financial services market.
Antony Jenkins, former CEO of Barclays, predicted last week that the "unstoppable force" of technology will lead to a number of "Uber moments" over the next decade that will greatly disrupt banks, according to The Guardian.
More than 50 fintech startups are now valued at more than $1 billion, and the rise of automated wealth advisers like Wealthfront and Betterment (both approaching $3 billion in assets under management) has led traditional investment firms Charles Schwab and Vanguard to launch competing programs, The Economist reported.
Lending Club, which facilitates peer-to-peer loans, is expected in 2016 to be doing well over $1 billion a month in credit. It's success has Stanley Pignal, The Economists banking editor, declaring that the website is to banks what Airbnb is to hotels.
Few sectors of the financial industry are safe, Pignal says.
"2016 will be the first full year in America where companies will be able to 'equity crowdfund,' giving (small) shareholdings to backers wanting to invest perhaps just a few dollars," Pignal said. "The money-transfer business is gradually being wrested from banks and specialists like Western Union, which offered uncompetitive exchange rates: nimble online operations like TransferWise are growing fast."
The new startups are getting government help, too.
Contrary to increased pressure for stricter regulation, the Financial Conduct Authority is launching a regulatory sandbox in the spring, allowing "companies not currently authorized by the regulator to do business in the financial services sector" to test new products and services within this sandbox without having to apply for full-scale licensing, according to Forbes magazine.
Forbes writer David Prosser notes that cost of compliance and regulation is currently the biggest barrier for fintech entrepreneurs to enter the industry.
Silicon Valley is competing for Wall Streets turf, but according to The Wall Street Journal, young entrepreneurs are coming to realize the financial industry is a more formidable opponent than they thought a symbiotic relationship could be their best bet. "The lenders can provide financial startups with capital as well as legions of depositors and expertise in dealing with regulators," the Journal reported.
"The classic narrative is the Silicon Valley firebrand whos taking on the system," Matt Harris told the Journal, arguing that in finance, "thats just not going to be a winning narrative."
