By Bill Taylor/ Contributor
Identity crisis. Companies that thought they were one thing are now describing themselves as another thing.
Remember a while back when the regulators got all hot and bothered when some non-nondescript companies changed their names to something like XYZ dot com, or Bob’s Cleaners and Cryptocurrency Store? Well, as we all know, SIZE MATTERS, meaning, if you are a large company you can do the same thing and not stir up any regulatory issues.
NASDAQ began describing itself as a fintech company several years ago even though they are an exchange operator with some new technology gadgets (ya know, fintech adds market cap). Now, here comes Fidelity Investments (mutual funds, investments, etc.) that says “no no, we are a tech company that just happens to be in finance“. It came about because some of the hot new investment companies (Robinhood to target one) BEGAN as a fintech company (still is, but it’s current and cool) and, well, Fidelity sounds stodgy. So, lets just change the companies description.
This little ‘tit-for-tat’ started when the co-CEO of Robinhood (Vlad Tenev) stated that his company was prepared to compete with the likes of Fidelity and Schwab since those legacy firms “weren’t really technology or engineering companies”. Guess Vlad was feeling a bit “frisky” since Robinhood has grown to have over 4 million brokerage accounts (more than E*Trade) since it was founded in 2013. Ah, but not taking it lightly, Ram Subramaniam (the president of Fidelity Brokerage Services) countered that Fidelity THINKS of itself “as a technology company that happens to be in financial services”. So there, Vlad!
Actually Fidelity really IS a big tech player. They spend around $2.5 billion on tech annually and employ over 12,000 “technologists”. They also have Fidelity Labs which is developing artificial intelligence and voice recognition services AND are already into digital currencies including a partnership with Coinbase. They also do a little bitcoin mining. So who is the “real” fintech focused firm, Mr. Robinhood? Maybe some of these companies should think of a re-branding to look more up to date and cooler.
How about “Fidelitech Financial”?
Bill Taylor is Managing Partner at Fintek Capital & a frequent contributor to FintekNews