How Will FinTech Manage in the New Political Landscape?
November 8, 2016 saw the end of a very long U.S. election campaign. After a fierce political battle, the Republican Party won the U.S. election and will take (back) control of the White House on January 20, 2017. The changes they institute will have dramatic effects on the U.S. market, which could in turn impact FinTech’s growth.
Take net neutrality: A vital concept to a fair internet and a key part of the development of many FinTech startups, which rely on open-source development and access to a quality level of internet. The Republican Party is not supportive of this concept and Donald Trump has voiced concerns over net neutrality, stating that it will target conservative media. Although he has not formally issued any plans to overturn net neutrality, the fact that both the incoming president and the Republican Party do not favor the concept could become a problem for FinTech startups in the upcoming year(s), as the loss of net neutrality would lead to the creation of a digital hierarchy that would seriously hinder the development of startups and smaller companies in the U.S. marketplace.
On the other hand, the Republican Party has stated they would look into reforming regulation. If this is put into action, it could create a much more welcoming environment for FinTech companies, as they are presently operating under rules that were instituted long before the internet became a guiding force in the business world. In fact, in the current international market, California and New York are ranked as the least regulatory-friendly FinTech centers. A regulatory reform could bring the U.S. business environment into the modern age and allow U.S. FinTech companies to grow and compete on the domestic and international stage. As well, the proposed lower business tax rate will likely lead to higher profits and income for businesses, leading to greater investment potential for startups.
It is too early to judge what the full implications of the U.S. election will be on the burgeoning FinTech market, but startups should be on alert to prepare themselves for the changing market and the complications that have the potential to come into play. If you can learn to manage under the new rules, you have the potential to flourish as the FinTech market continues to grow.