THE FUTURE OF FINANCE? FINTECH
Steve Sykes, 22 July 2016
In a recent LinkedIn post, Daniel Burrus, one of the World’s Leading Futurists on Global Trends and Innovation, noted, ‘despite the clear warning signs for every industry, there are still those who believe that the old way of doing things will continue to work for another 10 years. The incoming freight train of technological change has done little to change those who find comfort in burying their heads in the sand and considering game-changing innovations hype.’
Burrus identifies that the speed of change that new financial technology start-ups, also known as FinTech, will bring to the finance industry, is something to be closely watched:
The speed with which online start-ups and competitors can grow in comparison to the world’s largest organizations is staggering. There is already a long list of retail and media companies that failed to adapt, and we know how most of those stories ended.
To me, Fintech is about disruption and of course the main players to disrupt in finance are the banks.
The following story tells why banks are so susceptible to disruption:
I had to lodge a sizeable Bank Guarantee for our new premises. The bank wouldn’t do a draft, so it took three attempts and three trips to the bank, before the landlord was happy with the BG. Each one cost me $250. Plus $500 for preparing a one page document. But here’s the kicker – I will earn miniscule interest for the six year term, but have to pay .75% of the BG each half year for the term. Total cost of over $20,000 for the bank to hold on to my money for six years and earn a yield of at least two times what they are paying me in interest.
I don’t blame the banks. It is just how it is. But don’t think for one minute that someone in the FinTech world is not figuring out how to do this better, faster, and online. The result? A far better deal for the end user. It’s ‘customer first’ thinking.
No, it will not be SER going in to the BG business. But wow – do we have plans. We are trying to solve the disconnect between the push for ‘as a service’ solutions as against banks mired in 1986 thinking that bricks and mortar, or something on wheels, form the basis of good lending. It might, but it’s a race to the bottom and only the biggest come out on top. And what the customer needs has largely been ignored. FinTech proves that these situations never last.
So SER, a business that has been around for 23 years, knows to its core that our future is based on innovation – not what we have done to date. For me, well, I can’t sit still anyway, so it represents a terrific adventure and I think that just maybe, the last 23 years have all been about preparing us for the road ahead!
Managing Director, S.E. Rentals
S.E. Rentals are the finance as a service specialists that will help you grow your business by providing finance solutions in an 'all things technology' future. We provide you with the flexibility, scalability and agility to help you achieve your Managed Service objectives, and our unique in-house software platform, Finance Oxygen, automates the process for you