Cubed & Integrated Finance: Uncovering the Secrets of Fintech
You can find the first part of this article on the Integrated Finance Website here, where Elliott describes his story, why VCs have such a high failure rate and what Big banks’ think about fintechs!
The future of banking: centralisation vs. decentralisation
In contemplating the future of banking, there are two contrasting scenarios: centralised banking, where major platforms dominate financial services, and decentralisation, fostering a diverse array of service providers. Elliott provides insight into these potential paths:
Centralised banking
While an appealing utopian vision, it faces practical barriers. Global politics and profit-making methods may keep consumers uninformed about certain financial operations. Achieving full centralisation seems improbable.
Decentralised banking
This model, often termed the "marketplace of marketplaces," holds promise. It envisions a future where individuals can choose products tailored to their needs, values, and risk preferences. Considering factors like banking education, this decentralised approach fosters personalisation and consumer comfort.
Realising this vision hinges on innovation, technology adoption, and, potentially, regulatory adjustments. The core technology exists; what's needed is a concerted effort to enhance it. A shift towards decentralised banking may mark a significant departure from the present, but it's a path that could lead to meaningful change in the financial landscape.
Conclusion
In exploring the fintech sector, we navigated the intricate maze of venture capital investment challenges, notably the high failure rates and their underlying causes. We learned of the issues stemming from inadequate due diligence, the problematic herd mentality, and the prevalent financial models that may stifle growth.
Additionally, the dynamics between fintech and traditional banks showcased an evolving landscape where collaboration and innovation take precedence over competition. While significant progress has been made, barriers still exist, emphasising the need for a cohesive approach to unlock the potential within the industry. Moreover, the conversation around centralised versus decentralised banking illuminates possible future trajectories for the financial sector.
As we conclude, it's evident that for fintech to revolutionise banking truly, a concerted effort is necessary from all stakeholders to address existing challenges and harness the vast opportunities awaiting.