This is a great read by fintech thought leader Marc Gagne’ on where we stand 10 years after the Great Recession and how fintech has evolved since then. Remember that famous phrase “too big to fail”? Fintech has solved that problem, according to the author. You’re preaching to the converted, my friend.
“The Great Recession was in 2008. Ten years on, after the turmoil and the pain it caused on a global scale, we can finally begin to see some good to come of it. It’s been a long, arduous journey, and that journey is by no means over with yet, but the transformation of the financial industry has produced exciting results that seem to benefit everyone especially the consumer.
From the way we invest and trade, to the way we raise capital, lend, and send payments, consumers now have more choices, more access, and more freedom. Our experience is better.
And what has emerged to set this happy tone for the future of the financial industry? It’s artificial intelligence-driven upstarts who, together, form what’s called FinTech.
Fintech Companies Jump-Started the Transformation of the Financial Sector
In these ten short years, we’ve watched an industry transform in a very dramatic way. The financial giants — who’ve long thrived by making sure things in their industry change as little as possible — have awakened from their long, comfortable slumber to realize, just in time, that their business models are in need of changing.
And what woke them up? FinTechs. These new guys rose up fast and arrived with technology on their side.
Here’s how they managed to disrupt the financial sector and upend the way we bank, invest, and plan out our financial futures.
But the ending to this story isn’t what many would have guessed. It’s a kind of happy synergy, where everyone involved— banks, upstarts, and consumers — gets to reap the benefits. Here’s how it happened.
Fintech’s Roots Began Here— Banks that Were ‘Too Big to Fail’ Let People Down
Lehman Brothers. UBS. Ameriquest Mortgage. Merrill Lynch. Washington Mutual. Fannie Mae and Freddie Mac. HBOS plc in the UK. And Royal Bank of Scotland, which was for a brief moment the largest bank in the world.
All familiar names in banking. Most with footprints that spanned the globe. Together, they formed part of an industry ‘too big to fail’. Yet, each one of those banks fell victim to the 2008 collapse and as a result were either acquired or bankrupted in the ensuing economic crisis that followed.
‘Too big to fail’, as it turns out, was a lie.
Regulators used the phrase ‘too big to fail’ consistently to describe banks like Wachovia in the United States and other big players around the globe. If they went broke, the Federal Reserve or its equivalent would prop them up, hopefully forestalling a market meltdown….
Here’s Exactly How Fintechs Owned the Customer After the Great Recession
When Big Banking let the people down, those app-driven, people-first startups looked mighty friendly and appealing. They were everything the big old banks weren’t.
- More access
- More control
- More freedom
- Lower fees
How did they do it?…”