Chris Skinner wrote a provocative thought piece just before Christmas “Go Fintech or go home (and don’t be Techfin)”. While I agree with the bulk of his article, I think he’s got the labels wrong.
Most current FinTech companies (including, or perhaps especially, the unicorns) are just what he describes, mobile apps and web-interfaces. They do a good job of plastering over the cracks and faults in the finance system to make it more useable to ordinary people. By ordinary I mean folks that can’t afford a full-time wealth management teams. But at some point all those funky companies on Shoreditch still have to interact with a banking system fundamentally based on 18C principles of commerce. We may have dispatched the Gold Standard, but you wouldn’t know it from most financial transactions.
FinTech is finance systems first, made smoother with the application of technology.
TechFin is using technology to start over and build a finance system for a world that is hosted data, end-to-end secure, distributed, continuously deployed, etc. A finance system for the 21C, a finance system where the starting point isn’t the legacy of +200 years of operation.
Chris is right that this brave new world probably won’t be built by the incumbents. For all the reasons of having to keep the current money making machines turning, plus turkeys don’t often vote for Christmas. What if the future banking system, is one without banks?
After all, my Sterling is just a field in a datacenter somewhere. So are my dollars, yen, Euro; for that matter why not my coffee loyalty points, hours volunteering at the hospice, it’s just data.
We’re trying out ideas around the !bank, the concept that your data aka money, is owned by you and you issue API access to service providers aka credit agencies, shops, insurers, etc. You may want to simplify that through an intermediary aka a bank, you may choose to host your own data repository.
Having said that, the brave new world probably won’t be built without the incumbents. Changing behaviour is *hard*, ask anyone who’s finally given up on PGP for email cryptography. Despite evidence to the contrary, people trust banks (or at least distrust them less than the current alternatives). Those incumbents have the market share, the commercial networks, and, for a diminishing number of people, the distribution network for physical currency.
Bristol isn’t claiming excellence in everything, but we do know a thing or two about engineering. We’re also looking at user persona that aren’t the hipster generation, but those with limited means but real needs. We’re coalescing around 4 themes that we think could lead to a realistically viable next-generation system that can co-exist with the existing one, but ultimately replace it;
- Better budgeting
- Money !== value
- Regional & local strength
- Education & knowledge
This is a collaboration between companies, not a research platform. We’re building engineering businesses from the products & services in these themes, just not from usury (or mobile apps).