Fintech 2017- Quo Vadis?

Deborah Kerr and Robert Taylor on the Quo Vadis filmset

Every year Jim Marous publishes the Top banking trends and predictions. On 21 Dec 2016, Jim published the sixth edition with predictions for 2017.

My input was a “pick-and-choose” list of bullet points. You can find the full list below. My input date was 27 Nov 2016. We are now two months later, and I captured some articles/announcements related to some these bullet points. And I added at the end some additional observations. All of this should be taken with more than a grain of salt, as I dimmed my focus on FinTech since starting my Petervan Productions sabbatical on 1 Nov 2016, and don’t read/research as much as before.

As always, these are 100% my personal opinions. Sometimes provocative, sometimes innocent, sometimes the cynical view of a 60 year old incumbent, but hopefully at times contrarian and inspiring. Here we go:

+++ start 27 Nov 2016 input

• In general, 2017 will be the year of illusion, delusion, and distraction for and by FinTech.
• Blockchain/DLT/etc will prove itself as one of the biggest distractions of this era in that it does not solve any existing problem, maybe it solves some future problems to be identified, but with a price to pay: the price of fundamental process re-engineering. Very few will be up to this task which involves community management and regulation.
  • Post input contradictions: Swift tests #blockchain for Real Time Nostro Database Reconciliation and McKinsey, Accenture, AITE, IBM, Goldman and many others think nirvana time will be 2025’ish
• In 2017, subject to pressures on the bottom-line and macro-political forces, banks will witness massive lay-offs and disinvestments in FinTech innovation labs and initiatives. These initiatives will be re-branded as research efforts, focused solely on incremental improvements in the core business lines.
  • Post input contradictions: Stunning innovation lab from kasikornbank #thailand and Belgium and UK Fintech fall in love with each other
• FinTech will manifest itself as a techno fantasy, drawing attention away from the real problems to be tackled: cyber-security, trust and identity, which only can be solved through laser focused industry and government efforts. No single company can solve these on their own, and self-serving patenting will be counterproductive to industry-wide success.
• In the US, the Trump administration will out-regulate innovation to protect the financial institutions fiefdoms and their control of money. But despite the Trumpian rhetoric and “opportunities” for financial institutions to start playing their old extraction-value games, financial institutions will be challenged by citizen uproar to give back to society.
  • Post input evidence: Six Goldman Sachs executives added to Trump administration
• Despite all these negative predictions, volume and frequency of FinTech investments will dramatically increase. Like in other industries, a 100M$ Fund will be considered as peanuts. Like in traffic jams, investments become bigger and last longer. Like traffic jams, ROI will be difficult to impossible to resolve.
  • Post input evidence: Softbank’s 100B$ fund and China launches 1.5B$ Fintech Fund

+++ end 27 Nov 2016 input

What I am missing in many predictions is that most are just extrapolations of existing trends. They ignore the fact that the trend can just die or become a commodity where prices trend towards zero.

What I am missing is the creative/opportunity orientation (what do you want) vs. the reactive/responsive orientation (what problem are you trying to solve).

The way we think about change, disruption, and transformation) or whatever you want to call it) is going to be completely different in 5 years time. The speed of change is so big that our thinking is getting disrupted. The underestimated and ignored exponential power in all of this is the “power of networks”. I have another post in preparation for that, but in the meantime I would invite you to get familiar with following books and thinkers:

• The Seventh Sense: Power, Fortune, and Survival in the Age of Networks, by Joshua Cooper Ramo
• Whiplash: How to Survive Our Faster Future, by Joi Ito
• The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future, by Kevin Kelly
• “I wasn’t expecting that” from Simon Wardley’s upcoming book
• Cloud wars by Simone Brunozzi
• The end of cloud by Peter Levine from Andreesen Horovitz
• Trillions: Thriving in the Emerging Information Ecology, by Peter Lucas, Joe Ballay and Mickey McManus (already from 2012, but so advanced in its thinking)

Rebelliously yours,