Rethinking Disruption
Understanding Change In The $900 BN FinTech Landscape
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Success breeds complacency. Complacency breeds failure. Only the paranoid survive — Andrew S. Grove
As FinTech or Financial Technology continues it’s march against incumbents in the banking and financial services arena, the magazine American Banker, this month, reported a surprising development. The chief of The Office of The Comptroller of The Currency (OCC) Keith Noreika confirmed the agency’s fintech charter, if implemented, could be granted to commercial firms like Walmart or Google. This development builds on the fact that FinTech players such as Square and SoFi have applied for banking licenses. Now, it seems the initial FinTech disruptors could be subject to a taste of their own medicine.
It seems, then, in the increasingly complex world of business, there are no rules. Rather, it’s the application of best judgement that could paradoxically come ‘straight from the gut’. This article explores the nature of disruption in business, the four stages of disruption, the possible responses to disruption and ends with a question: How important is paranoia in decision making?
1. Introduction
In the summer of 1999, “Pirates of Silicon Valley” — a movie directed by a Canadian film maker Martyn Burke left an indelible impression on my mind. The movie recounts the story of Steve Jobs (Apple) and Bill Gates (Microsoft). Although the movie was very similar to a biopic, it introduced me to two important business concepts — speed to market (that of Windows 95 which provided Microsoft an edge over Apple) and strategic alliances (that of Microsoft with IBM).
Almost two decades later, agile and speed to market have become competitive advantages that incumbents have to master against the new wave of FinTech startups. Surprisingly, strategic alliances have already begun to form between FinTech startups and incumbents within the Financial Services industry.
The question then becomes: have the fundamentals of business always remained the same and is it almost impossible to predict change?
