Having worked on the launch of a major banking app a couple of years back, I've been interested in the development of fintech for sometime now.
Sometimes the headlines, noise and buzz - call it what you will - hasn't always reflected the success. Sometimes the success hasn't been reflected in headlines.
The article in TechCrunch cited with this post caught my eye. Although a review more focussed on the US fintech scene, the visualisation of the potential future of fintech - and where the opportunities lie - was interesting. Almost like the book, the "Journey to the Centre of the Earth" this looks at how as fintech moves towards the core, its true impact will be felt more and more.
In a way it's self explanatory - by the time it reaches the core it will have significant scale already. More people will know about it.
What's not clear though is whether the established banks' defensive plays through their own innovation labs and tech projects will halt or merely delay that journey. The Telegraph is sceptical:
Both articles refer to lessons from other industries where seemingly untouchable giants faded - Nokia being a very recent example. For me a lot depends on two things:
- the consumer. How much will they really embrace change? How will the non-millennials deal with a wide range of products and services from a multitude of providers? Will they stick to what they know and feel comfortable with?
- regulation. Whilst established banks are potentially less nimble than start-ups (yes in theory, but they are spinning off internal digital divisions with much more agile methods), does their established understanding and internal governance around regulatory requirements and change actually give them an edge? Will regulation move towards inspiring and enabling innovation? How will cyber threats impact on the direction of travel?
That's where, clearly, success will be defined. Cautionary tales from times gone by show that the best product doesn't always win.
Hence the noise.
Startups challenging the financial sector are playing the long game; there will be no overnight successes. I believe we won’t see comparable giants from these crops of startups until a decade out — but change is coming, and it is inevitable.