S8 E9: Fintech Recap: Klarna’s “Balance” vs. Banking, Affirm's Resilience, and Niche Neobanks Refuse to Die
Fintech Takes
Adaptability in Lending: Embrace the Challenges
Navigating fluctuations in interest rates presents significant challenges for lending firms, particularly for those reliant on individual merchant partnerships, as these arrangements complicate repricing efforts. Unlike traditional banks that benefit from built-in variable interest terms for credit cards, which allow easier adaptation to rising rates, firms with less responsive funding costs risk pressure from capital market shifts. Building a disciplined lending business may provide long-term advantages, especially if it can withstand the pressures of a changing macroeconomic environment. Engaging in lending during prosperous times can be misleading and may leave firms unprepared for downturns, highlighting the need for a focus on learning and adaptability.
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