An executive at a large asset manager has recently said that fintech was “not a game changer” and that financial technology companies are too small for the funds industry to work with. They should focus on pedestrian matters rather than think big, he said. I do not agree.
I’m not neutral – I worked for 20-plus years in the City and have now co-founded a fintech company working with asset managers – but my experience strongly jars with those sentiments.
The Axa Investment Managers research strategist, Michael Kollo, said fintechs could compose of “three people in their mid to late 20s” who would be unlikely to be chosen to rework a large institution’s system.
But the fintech companies that I come into contact with are typically staffed by market veterans who have chosen to leave their large safe employers in order to use their experience and contacts to innovate – something they frequently felt unable to do as an employee. They are most definitely not in their mid-20s. Whilst there is nothing wrong with being that young (Elon Musk was 28 when he set up PayPal) it is incorrect to characterise allfinancial technology companies in that way.
Having recently departed big financial institutions these veterans are building businesses based on their learnings from the other side of the table. They are bringing innovation and fresh perspective on the shoulders of an understanding of the restrictions, requirements and responsibilities of a regulated organisation. They have felt the pain first hand and have set out to build a future, cognisant of, but without the restrictions of, legacy processes. They are excited by the possibilities of partnering with the industry they know so much about.