Is It Forgivable To Be Ignorant About Fintech?

Chris Skinner

I just met with some people from a financial PR firm in New York, and as we were talking, they told me about a great show that aired recently on 60 Minutes.  The show was all about Africa and how they’re using money in a new way through something called M-Paysar.  “Ah,” I said. “You mean M-Pesa.”

“Yes,” they replied. “That’s it. Have you heard of it?”

I avoided letting my eyes roll to the heavens, but I was intrigued. The PR guy said that 60 Minutes covers only stories that no other news media has covered before, and it’s leading-edge. I was thinking, “But M-Pesa has been around since 2007.”

It reminded me of my favorite slide from Bye Bye Banks, which asked a wide range of European CxOs if they’d heard of companies like TransferWise, Venmo, eToro, Square, PayPal, and more, and if yes, did they know what these companies did? Most had no idea.

This is forgivable. Should European CxOs of financial firms be aware of American fintech startups that are not in their space? Should American PR firms be aware of Kenyan mobile wallet networks that are not in their space?

You may say yes, as that’s a long way off before it needs to hit their radar. Or you may say no, as anyone could copy what these guys are doing and bring it over here.

I fall into the latter camp, as I don’t believe that ignorance is bliss. I would much rather see an emerging business model somewhere in the world that I could replicate than let someone else do it and threaten my core business.  Unfortunately, I don’t run a bank, so I’m just talking here, but think about those who make this happen and do it well. One in particular comes to mind: Rocket Internet.

Rocket Internet in Germany has no shame in saying what it’s about. Its business is seeing what companies in America do online and bringing it to the rest of the world: Copy fast. Some others do this, too. Aren’t PayPal Here and iZettle just copies of Square? And yet Square still IPO’d with a valuation of $4 billion (although most thought it would more like $6 billion).

Right now, I think there are many opportunities out there to copy fast, from providing mobile wallets to the underbanked and unbanked to creating real-time exchange of value through the shared open ledgers of the blockchain technologies. This is not something unique to me, but is the clear development of the Fintech world. Fintech is seeing billions of dollars – some say about $30 billion this year ($12 billion last year, $4 billion the year before, less than a billion the year before that) – of venture capital funds flowing into Fintech.

Where’s it going?

It’s going into payments (a third of all investment), P2P loans and crowdfunding (a third), blockchain start-ups ($1 billion+), and then firms that are innovating bank processes around data analytics and user experience (the remainder).

What this means is that a reconstruction of the banking system is taking place before our eyes. This reconstruction will make it fit for the 21st century using peer-to-peer connectivity through the mobile Internet and blockchain shared ledgers, making it near-free in real time.

That is surely something bank CxOs should know about it. And if they do not, then that is unforgivable.

Want more insight on the future of banking? See Banking Must Be Real-Time And Near-Free.

About Chris Skinner

Mr. Skinner is chairman of the Financial Services Club, CEO of Balatro Ltd. and comments on the financial markets through his blog the Finanser. He can be reached at