FinTech is so disruptive it might end up disrupting itself

fintech earthquake
Image credit: Andrey VP /

We are generally happy to state publically that mainstream drones, AI, VR, 5G and almost any other technology that has graced slideshows around the world is still some way off. Yet there is one whose time seems to have come: FinTech.

Although FinTech is a catch-all word (another one made up by our industry) it does seem to truly sum up disruption in the world of money.

On one level it sums up the attitude of millennials to banks. Why, they ask, would I ever need to go to a building and speak to someone about money?

On another level it sums up the feeling that digital players are the biggest threat, and certainly the biggest disruption, to the world of money since Blackbeard dug a hole to try and hide it.

On yet another it seems to sum up the threat posed to banking incumbents by new entrants that do not have the baggage of infrastructure, regulation, ethics and physical location that banks do.

And money is (dare we say it) more important than staying connected (some might disagree and say that being connected is now a ‘right’). Still, the saying ‘follow the money’ holds true and it is exactly what most tech companies are doing and many are throwing a lot of money at that goal.

Such is the potential seismic effect that there are think tanks whose task is to study the socio-economic impact of fintech. And they are well funded.

In short, FinTech is one of the most disruptive things happening to our world. It is taking the management of money from a long drawn out process to the click of a button.

Everything must happen instantly. And this means that everything, every transaction, is riskier simply because the button could be clicked at the wrong moment, or for the wrong amount, or to the wrong person.

Some will remember their elders having an annual lunch with their stockbrokers to discuss their short-term investment portfolio – you know, the shares that you should keep for just ten years. Now ‘short-term’ is milliseconds.

Yet, FinTech, in many senses, is a shell.

At the moment, the shell contains very little. It contains money transfer technology, balance management and a little customer service.

Some believe that it contains AI and data management and blockchain (and probably 5G and VR). But in any real sense, it doesn’t.

But it will.

And when it does contain some of these new technologies and automated techniques, things will definitely get better.

And they will also get worse.

They will get better because moving money around will be simpler, cheaper and faster.

It will get worse because the room for mistakes, hitherto mitigated by time, will increase. The security risks will increase. The potential for frustration will increase. The potential for things to go (really badly) wrong will increase.

FinTech will not only end up disrupting traditional banks and other financial institutions, it may well end up disrupting itself. And the socioeconomic impact of that will be enormous.

Anyway, time for my annual lunch with the stockbroker.

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