The “fintech” revolution will end badly for most startups, according to veteran financial-services investor J. Christopher Flowers.

While a few new technology companies seeking to win business from established banks and financial-services firms will be extremely successful, the majority won’t survive because of a fundamental strategic contradiction, Mr. Flowers said.

Silicon Valley entrepreneurs, unlike traditional finance executives, hew to “the tech idea that you must get big fast and dominate a sector and achieve a network effect,” he said. But that isn’t a good approach to finance, he said.

“In lending, this idea is not only wrong, it is very dangerous indeed,” Mr. Flowers said. “It is one of the oldest adages in our business that the lender that grows fast is the lender with future losses.”

The former Goldman Sachs Group Inc. banker has led more than $14 billion of investment in financial-services companies world-wide through his eponymous private-equity firm, J.C. Flowers & Co. He spoke at the Super Return private-equity conference in Berlin Thursday.