Prediction Market Add-Ons Will Accelerate Fintech Churn, Warns Inversion CEO
Prediction markets aren't just for betting on elections anymore—they're about to gut traditional fintech.
Inversion's CEO drops the bomb: bolt-on prediction features will trigger a customer exodus from legacy platforms. Why stick with static portfolios when you can hedge, speculate, and vote on real-world outcomes inside the same app?
The Integration Tipping Point
Forget standalone apps. The real disruption kicks in when prediction layers weave into existing trading and banking interfaces. Suddenly, your brokerage isn't just for stocks—it's a platform for wagering on tech IPOs, interest rate moves, or even corporate mergers. That functionality creates a gravitational pull that legacy systems can't match.
Churn Gets a Turbocharger
User loyalty in fintech is already thinner than a banker's smile during a downturn. Add a compelling prediction engine, and switching costs evaporate. Customers follow functionality. If a neobank or trading app lacks these social, gamified markets, users will jump ship to platforms that have them. It's a features arms race where the incumbents are holding water pistols.
The data doesn't lie. Engagement metrics for apps with integrated prediction features show users logging in more often, executing more transactions, and sticking around longer. That's the holy trinity that venture capitalists foam at the mouth for—and exactly what stagnant platforms are losing.
A cynical take? The finance industry has always been a prediction market—just one where the house (read: large institutions) always wins and the odds are never published. Decentralized versions simply cut out the middleman and let the crowd set the price. Some call it gambling; others call it price discovery without the billion-dollar broker fee.
Bottom line: The 'wait-and-see' approach is a one-way ticket to irrelevance. Fintech's next wave won't be fought over fractional basis points on savings accounts—it'll be won by who lets users bet on those rates first.
Santos says mainstream platforms should focus on growing with users
Robinhood and other platforms began incorporating prediction markets in 2025 by partnering with prediction companies. In August, Robinhood partnered with Kalshi to enter the sports betting market.
The company’s Prediction Markets Hub now enables users to wager on popular pro and college football games. In addition, Coinbase is also preparing to launch its own prediction market, in collaboration with Kalshi, as it seeks to expand the range of asset class offerings on its website amid declining demand for digital assets. Gemini was also granted CFTC authorization to be a Designated Contract Market, offering regulated prediction markets for customers in the United States.
However, Santos believes that trying to put such services on mainstream platforms WOULD be more of a departure from their key mission of providing a stable and reliable service to retail users. He argued that, for Robinhood and similar platforms, what matters is the simplicity of their platform design and accessibility; the trick is to achieve long-term growth with users, rather than maximizing short-term payouts. He added, “If durability matters, you optimize for staying power.”
In his X post, he also explained, “Casinos serve just enough alcohol to increase the house edge, but not enough to make players leave the table. Financial superapps are attempting the same optimization. The failure mode is over-extraction → churn.”
Critics argue that weak regulation makes prediction markets vulnerable
The Inversion Capital Founder said prediction markets can potentially create a spike in numbers, but at the cost of long-term risks that may threaten user stability on financial apps. Products like credit cards, insurance, and savings accounts are not as flashy, he said, but they tend to foster long-lasting relationships with users because they’re integrated with everyday financial management.
Critics have attributed the growth of betting markets and the muddied distinction between trading and gambling to the TRUMP administration’s relaxed regulatory approach. They said this lack of scrutiny also leaves the markets vulnerable to insider influence and abuse.
Prediction markets, notably Polymarket and Kalshi, surged during the 2024 US presidential race, generating billions in betting and consistently tilting the odds in Trump’s favor, contrary to polling data. By the time the elections were drawn to a close, the markets appeared to be more accurate, reinforcing the view that betting markets would outperform traditional forecasting.
So far, Polymarket and Kalshi have partnered with top news organizations, including CNBC, Yahoo Finance, and CNN, to incorporate prediction market odds into their reporting.
In early 2025, Intercontinental Exchange also revealed plans to invest up to $2 billion in Polymarket, part of demand prompted by a surge in customer interest in market predictive data for trading.
However, regulators in multiple states, including Nevada, New York, and Massachusetts, have attempted to halt the operations of prediction markets, particularly those of Kalshi. They’ve contended that the platform’s contracts are classified as gambling wagers, so the company is now embroiled in lawsuits questioning regulators’ power to pursue the platform.
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