577 financial services companies listed in the Global 2000, and

……. most determined among all large incumbent enterprises to stay in business.

by Roger Strukhoff

There’s a school of thought that says the best way to disrupt the financial services industry would be to throw a bunch of people in jail.

The damage wrought to the global economy in 2008-09 by house-of-cards speculation and corruption should be of interest to economists and people 500 years from now.

Extraordinary remedies suggested in the late days of the W Bush administration and undertaken during the Obama years included active management of General Motors, hundreds of billions of dollars in bailouts, and the printing of money by the Federal government as never before imagined.

Yet human nature hasn’t changed, and there are relentless efforts to roll back new regulatory structures designed to prevent (or at least forestall) a sequel to this movie. What will prevent a new catastrophe in this current age of a brainless, emerging trade war and weird volatility in so many of the world’s currencies?

In a word, Fintech. (Just kidding.)

Nothing, short of an economic meltdown and consequent transformation of the world into something akin to Cormac McCarthy’s world in “The Road” will seriously impede the continued, highly automated global trading in securities, commodities, currencies, and the infinite derivatives that can be generated from them.

There are 577 financial services companies listed within the Global 2000, and this group is the most agile — and the most determined among all large incumbent enterprises to stay in business.

But meanwhile, an insurgent Fintech planet is being created. Today it’s still on the margins. But in a multi-trillion-dollar global financial services industry, even the margins provide some benefit for alacritous investors and enterprises.

Fintech. (No, seriously…)

Indulge me here while I make a few points:

  • The Bitcoin crypto market has a current market cap of $125B as of the present moment.

  • Ethereum Ether is worth more than $40B, and there are 100 – yes, one hundred – other cryptocurrencies adding a combined $120B to this market sector.

  • Meanwhile, just oodles (I can’t think of a better quantifying word) of Fintech companies continue to spring up throughout the world in several categories. Check out this landscape of more than 1,000 Fintech and related companies from ChiefMartec. Google “Fintech map” and find many more graphics of this ilk.

Marketing Technology Landscape: Over 6,000 companies listed since 2011 

Source: ChiefMartec.com Marketing Technology Landscape. To download this graphic as a Hi-Res PDF or in an Excel spreadsheet for list of company names, please click Marketing Technology Landscape ( Blog author’s subscriber form registration required )

  • Last year was the 1849 Gold Rush for token launches. This year, it’s a bit more sober and serious. A recent example is that of Etherisc (in the service of full disclosure, a company for which I do some work) which has developed a single-use insurance application called Flight Delay, and which has more recently held a utility token sale. The company will raise around $3M in this sale. The proceeds are to be used to continue to develop a protocol that will serve any company or people who want to try to disrupt the insurance industry.

So, is it time for you to explore?

Hell, yes! So Fintech (and its Insurtech and other siblings) are making a dent in this universe. Financial services companies have historically been the most aggressive deployers of new IT.

Michael Bloomberg became a billionaire developing terminals to get them the data they needed as quickly as possible. Today, insurgents like FactSet are cleaning Bloomberg’s and Thomson Reuters’ clocks in this space.

Vivek Ranadive (founder of TIBCO) was able to become an NBA owner from his idea of increasing Wall Street system performance by microseconds. The multi-tenant data center industry found prime customers in traders who want to locate their systems by focusing on the speed of light.

But now, with Fintech and the Digital Transformation, it enables, the financial services industry feels threatened more than tantalized. Even so, the two great rivers of incumbents and insurgents are destined to have a confluence of some type.

Digital Transformers – whether individual investors, corporate asset allocators or C-suite chair occupiers – can benefit from taking a close look at those 1,000+ companies and following those ideas that can help them today and position them for tomorrow.

More on Digital Disruption:  Disrupt or Be Disrupted: Consumer Goods and Services

Creating the Digital Enterprise Transformation Culture

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