Goldman Sachs says that over $4 trillion in addressable revenues and $470 billion in profit at traditional financial services companies are at risk of being disrupted by new technology and tech entrants. I think every bank, financial services institution, and FinTech participant should read this statement twice a day. This reminds me of a great saying by Ken…
People will try to tell you that all the great opportunities have been snapped up. In reality, the world changes every second, blowing new opportunities in all directions, including yours. --Ken Hakuta
I believe that the major driver behind this disruption will be the change in Consumer Behavior that will result in a massive uptake of alternate payment technologies. A survey done by Accenture with banking customers reiterated this point.
According to Goldman Sachs’ report, the financial services industry is becoming highly social (speaking of which, you should see Venmo Emojis) and democratic as well, as it continues to move online and becomes more automated – empowering consumers, disrupting existing banking and credit systems, and creating new markets. This is happening through crowdfunding, wealth management, lending, and payments among other categories, and fundamentally changing the way these markets operate. Look at the chart below and note the dark blue circles that depict the immediately addressable opportunity in $ billions.
It's not the Payments hype that the bankers/financial services incumbents dislike, but it's the disruption that will be caused is what they are worried about. They must embrace the change...I am reminded today of what Aditya Khurjekar (co-founder, LTP) wrote sometime back... Don’t Make Fun of the Payment Nerds…You Will Work for Them one Day!