Next Gen Fintech – Where Will It Come From?

Next Gen Fintech
Here is a great observation on a fintech ‘three-way’ (no, not THAT kind) discussing where the really hot next-gen of financial services will come from. Will the “Legacy West” (U.S.-Europe), the “Growth East” (China-India) or the “Innovation Economies” (Africa, South America, lower Asia) be the next leaders in advancing financial services? Each is distinctively different in their approach and geopolitical needs. Very insightful.

(Bill Taylor, CEO)

“I’ve blogged about how I see leadership in the developing (developed now) economies of China and India, and the new innovation models of emerging economies in Sub-Saharan Africa, but not quite in the way in which I see them now.

The more I think about it, we have three major fintech models, each with their own unique blend of thinking. The mainstream fintech discussions here in Europe and America is how to reboot the antiquated banking system. Due to the implementation of technologies in the 1960s onwards, these economies have a heavily layered structure of year upon year of relentless upgrades and recovery plans. It is these economies that talk about the challenges of legacy systems and core system upgrades, and they recognise that something radical has to be done.

Due to the antiquated nature of the infrastructure of these economies – most of which predates the internet – I call them legacy economies. The fintech in these legacy economies approach things in three ways:

  • Broaden the financial offer to those who have been underserved or unserved in these markets, for example Funding Circle for SMEs and SoFi for students.
  • Remove the inefficiencies inside the banks, such as the cost overheads of the client onboarding processes, and/or …
  • … remove the friction in the customer journey by making things far easier, for example Stripe and Square.

All of the fintech radar ends up being focused on the incumbent’s existing way of doing things however…”

Source: BankNxt