| | JULY 20238CIOReviewIN MY OPINIONFintechs experienced exponential growth, soaring valuations and significant media coverage during the height of the pandemic, However, Fintechs are facing a significantly more challenging environment as interest rates rise and the broader economy slows, which led to a moderation in growth rates and a sharp correction in valuations in 2022. These challenges are likely to extend into 2023 with a recession appearing more probable in the U.S. So what does the new normal look like for FinTech companies this year? In short, growth rates leveling off, more disciplined cost structures, increased regulation, and industry consolidation.Nonetheless, we do not expect broader theme of disruption in financial services to be deterred. Instead, the coming year will likely serve as more of a weeding out process where the best positioned business models will distinguish themselves from their peers that have deeper structural issues. The resetting of Fintech growth expectations and capital investment should ultimately be healthy for the industry's financial performance.By Michael Taiano, Senior Director - Financial Institutions Group, Fitch RatingsFINTECH "DOWN, BUT NOT OUT"Michael TaianoFollowing a sharp contraction in Fintech valuations over the past year, it would not be surprising to see traditional FIs explore and execute M&A in the Fintech space, further blurring the lines between traditional financial services and Fintech
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