Talk on how tech trends will change the financial services sector, and how technology is disrupting financial business ecosystems

1. Putting the digital revolution
in perspective…
How social media, smartphones & the digital crowd will change financial services
Andrew Walker

2. 20 years of stuff that would never catch
on…

4. There’s a misnomer that the digital revolution
forces older industries to evolve…
(And become cool)

5. “Evolution” misdescribes what is actually happening. It’s a
wholesale marketplace shift that’s redefining business
ecosystems.

6. Perspective:
Why didn’t this happen?

7. In 2000, Msft owned Facebook… but didn’t realise it at the
time (so did Yahoo & AOL too)
Publishing tools
World Largest Chat App
World Largest Email
platform
Storage/Server infrastructure

8. So why didn’t they do it?
3 key tech trends that are
disrupting all markets…

9. Open Source standards / software
Since the evolution of HTML, open source
platforms have reshaped the way we think about
code & redefined the economics of digital systems
1

10. Cloud based infrastructure enabled
accessible scalability & created new
market opportunities
The capital requirements to scale digital
systems have disappeared… (relatively
speaking)
Clouds changed the economics of system
development too (agile feature creation & roll
out) & SAAS & Big Data
2

11. Consumer technology has proliferated
beyond the desktop stimulating
massive behavioural change
3

12. 3
Consumer technology has proliferated
beyond the desktop stimulating
massive behavioural change

13. The disruptive currents in the global economy
aren’t driven by IP or new devices.
It’s a shift away from ownership models to access
models, which is a shift to real-time,
disintermediated services
Supply-side has become more strategically
relevant than demand-side.

14. Real time economics, subscriptions, lifetime-value of clients, CRM vs BRM:
Data-powered from product design through to aftersales…

15. Uber, the world’s largest taxi company, owns no
vehicles.
Facebook, the world’s most popular media owner,
creates no content.
Alibaba, the most valuable retailer, has no inventory.
And Airbnb, the world’s largest accommodation
provider, owns no real estate.

16. Today, Tesla & Ford have given away patents with huge commercial potential:
An ecosystem response to a systemic problem… the end of 20th Century
models?

18. The growth of Fintech & crowdfunding is at the margins of the current
finance industry… but illustrates two critical changes:
Investors are emancipated.
Investment is becoming socialised and direct.

19. Fintech is the visible surface effect of
broader social computing trends

20. Investor Relationships
Style data
Reconciliation
Pricing
Wealth Management Advice
CRD trading apps
Identity management
Payments
FX trading
Bitcoin & cryptocurrency
payments/integration
Smart Beta
Indices
Image filtering
ID management
Video sharing
Platform integration
Multiplayer gaming
Fundraising
Advertising Analytics
Data mining
Dating
Social Media App Ecosystem
Fintech App Ecosystem
Similar?
Enhanced chat Emojis
Block-chain verification
ID verification

21. Communications
Social Media App Ecosystem
Fintech App Ecosystem
Convergence?
Data analysis
Verification / payment /
Transfer
Identity management
Communications
Data analysis
Verification / payment /
Transfer
Identity management

22. Yes. Convergence.

23. Within the wealth management industry,
converging systems will stimulate more
self-service, automated products.
Computerisation is drawn to regulation
& interoperability.
E.g. Post T2S one bank system can
connect directly with another for mutual
fund settlements, disintermediating the
previous transfer agency (human) role.
Three convergence predictions:

24. Outside the industry, computerisation
and interoperability will stimulate new
unregulated competition built on
self-service, automated models…
This presents a legislative challenge
for the regulators. You can’t apply bank
regulatory systems to software that
simply accesses regulated entities.
Three convergence predictions:

25. How do you regulate this? Alipay Yu’E Bo.
It’s a payment app with 300 million users.

26. 10 x HNW = $10,000,000 Investable assets
Basis point fees easy to manage.
10,000,000 x $1crowd = $10,000,000
Investable assets
Basis point fees needs a cloud of computers.
Pre-digital revenue model:
Post-digital revenue potential:

27. The practicalities of charging clients defines
both the size of the market and the
products/services on offer
Wealth management becomes a mass
market (retail) proposition for the crowd?
Pre-digital revenue model:
Post-digital revenue potential:

28. 1. The growth of self-service, automated warehouse
financial services

29. 2. Wealth management becomes “Family office” style
boutiques (without the families) – offering tailored services
across regulatory jurisdictions, automated custody banking,
exception modeling for clearing, data reporting…

30. 3. And expands to new mass markets that leverage both
your expertise, the crowd AND emancipated investor trends

31. The future has a long way to go in terms of
product development…
1. Trade positions in crowdfunding
2. Trade P2P debts
3. Use payment systems as banks
4. Build HNW style services around crowds?

32. 4. And a lot of new block-chain software to do it…

33. Don’t mistake early extinctions for a
shift back to old models…

34. Dinosaurs don’t go extinct if they
embrace technology….

35. (me) THANK YOU
Andrew Walker
Andrew@manvsbrain.com
@killdozer (on twitter)
(you) It’s finally over…