by: Grow VC Group
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Imagine yourself the CEO or Chairman of a prominent, success financial services firm. You’ve got decades under your belt of amazing success, boom years through to the technological advances and prestige that comes with your name. Yet you’ve had this nagging inkling for several years now and confirmed that something is eating at your margins and pushing a new market position on your company. Fintech innovators, along with their specialized products are forcing a change in the market.

Or truth be told, it’s not even the innovators themselves, it’s the entire market that’s pushing for change. What do you do? Do you let the Internet and market shift cannibalize your business? Do you cannibalize your business yourself? What can do you? ​

Fintech is important, don’t get me wrong, but what is going more important than fintech itself, is the global demand and significant push for more efficient and effective services and products in the financial services market. It’s bigger than any single technology or sector and its driven by a technological ripening, a new age of consumers with strict demands, demands that include an amazing push on margins on services that are expected to be delivered virtually for nothing. And right away.

From BNP Paribas, Credit Suisse, to Morgan Stanley, Deutsche Bank, ING, institutional buyers in consumer credit marketplaces, co-investors or sponsors in various primary online marketplaces, everyone is involved with their flavor of the day. And involvement may at times seem uncoordinated, but looking behind the scenes or extrapolating positions sought, there are clear strategies in place. Strategies that represent hundreds of millions of investment and billions of sought return in the long term.

We’ve discussed the extent and scope of market shifts in financial services, as well as the investments being made into it and how those shifts may be received or viewed by various market stakeholders. The changing landscape is a fact of the market, it will not make banks obsolete and it will not eradicate the asset management business, but it will call for a fundamental review of market positions.

  1. Specialists will emerge from generalists, for example wealth advisors may end up focusing on a target market audience, where robo-advisors will appeal to the younger generations.
  2. New innovators will be subject to strict scrutiny and over time business models will need to adhere to the same requirements as the incumbent financial services sector, but business models will benefit from further emphasis on best practices, compliance and market standards.
  3. Existing technology will be reviewed and it will be ultimately replaced by leaner, more efficient solutions that can connect openly to modern challenges.
  4. Efficient technology will flow through all facets and avenues of financial services, and in this ‘second coming’ of financial services technology, it will install itself in the sector for years to come.
  5. The true nature of ‘social’ in an online setting will cause friction in the incumbent sector along with loosening control over existing user bases and their interaction amongst one another. The fact that no one can own a person, hence a user, will become increasingly clear.

Paying attention to current shifts in financial services is a great start. Becoming literate about what Goldman Sachs estimates as a $3.3 Trillion addressable market opportunity should be top of mind for anyone in the financial services market.

Read the whole article on Crowd Valley Blog.

Deal Index Alternative Finance report

Data source: Deal Index Alternative Finance report.

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Grow VC Group The Grow VC Group is the world leading, global pioneer of securities crowd funding, peer to peer marketplaces, new investment models and global business development. Established in 2009, the Group has developed new investment models on six continents and continues to innovate the global market.

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