Development of FinTech in the lending space : case study on Affirm

Financial Technology (FinTech) is currently growing at a fast pace, with the aim to take the financial sector into the digital world. Fintech is starting to become a towering part of the economy within both the developed and developing countries. Within this paper it will be identified how governments, within Europe, Asia, and North America, dealt with the introduction of these new financial platforms. The development of Fintech is important as it supports the access to finance and create through its sustainable economic growth within different countries. To understand why this occurred a deeper analysis will be conducted. Within this analysis, the LASIC principles will be introduced. LASIC means Low Margin, Asset Light, Scalability, Innovative and ease of Compliance. The principles help us identify whether FinTech’s are aiming for a sustainable future, rather as aiming for profit. By examining the case of Affirm, a Fintech leader in lending space, previous information will be validated. Affirm gained a lot of attraction in the beginning of 2021, due to it transitioning to a public company, by listing itself on the NASDAQ. Within this case, information from press-releases, analysts and financials are used in order to get a better understanding of how they managed to develop to a company worth billions of dollars. In the end, it was identified that the digitalization and financial inefficiencies were the major drivers for the company. With their business model, they managed to reap the trust of people, who initially lost its trust in the existing financial system.