The Impending FinTech Revolution of 2016
Written By Jake Strickler
“Silicon Valley is coming,” wrote JPMorgan Chase head honcho Jamie Dimon in 2014’s end-of-year letter to shareholders. “There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking…They are very good at reducing the ‘pain points’ in that they can make loans in minutes, which might take banks weeks…We are going to work very hard to make our services as seamless and competitive as theirs…[and] are completely comfortable with partnering where it makes sense.”
What Dimon is referring to is the foreign invading hordes of “disruptors.” These groups are those rhapsodized start-up companies made up of those with unshaven faces and unshampoo-ed hair hiding their Caltech and Harvard brains. Further romanticization puts their headquarters in drafty basements and garages. Every so often, one of these lo-fi, disheveled, brainiac outfits (a “unicorn” in the parlance of our times) hits it so big that they turn an entire industry on its head and provoke something like a revolution.
Think Steve Jobs to the PC industry, Napster to the pre-iTunes record industry, or Google to the Yellow Pages.
Should Modern Banking be Worried?
Between the past history of “too big to fail” industries being toppled by a single innovation, and the hangover of distrust and resentment felt by much of the American public following the excesses that lead to the ’07-’08 financial crisis, the institutional banking industry does have something to worry about.