Looking Ahead In FinTech

Financial innovation is happening, but most consumers won’t see the bulk of it.  It’s happening behind the scene.  A lot of the smoke and fire around financial innovation is in Blockchain.  The lion’s share of money is going toward it.  But, it’s far deeper than that.

On Tuesday, I worked at Prof Mike Moyer‘s Venture class at Chicago Booth.  One question I received  is where do I see innovation in Fin Tech?  Instead of doing a series of blogposts I decided to post a link to this video.

 CME Group had a Tech Talk in London this week.  It’s a bit long for our attention spans today, but it is highly informative.  It talks about machine intelligence, AI, VR, cloud, regulation, blockchain, and other aspects of technology intersecting with finance.  Kudos to CME for hosting this and illuminating the conversation that is going on.

Here is an example of what’s going on.  Remember, AWS only came on the scene 10 years ago.  Financial firms were building their own data centers all over the planet, because of privacy/security.  Those infrastructure costs are highly inefficient at scale.  It’s only now that they are starting to look and experiment with public cloud.  That saves on infrastructure costs.  It helps their margins which are under assault from government regulators.

One thing that I have noticed is people that are building startups in B2B Fin Tech are older.  They have experience.  They have a lot more purpose.   Scott Mullens of AWS said, “Have a purpose when you move your FIS company to the cloud.  If you want to put the next hot dog eating contest up on the blockchain, that’s fine.  It’s cool.  But, it’s probably not going to be innovative or change the course of your institutional business.”

The interesting thing about this wave of fin tech innovation is it’s hitting all in the 9 months.  As Chris Dixon observed,  the “games” and fun stuff people did are starting to manifest themselves as real applications that solve problems for businesses.