Financial inNOvation

Following a visit to PayExpo at Excel (nothing to write home about, as far as most of the exhibitors are concerned), I attended the FinTech Road Show today which was supposed to showcase some of the most disruptive financial technologies in the UK startup world.

[Yawn]

I don't want to sound like a broken record, but 99% of companies in the payment industry solve problems that do not exist. As I stood in a queue at my local Waitrose, I thought that it would be a good place to visit for every CEO from the "disruptive financial technologies" playing field. Not a single customer left without a purchase. I.e. not a single customer had any difficulty with making a payment. The most inconvenient and time consuming part of the whole payment experience was product scanning and packing. The rest was painless, fast and secure.

The "financial innovations" graveyard is littered with the skeletons of solutions that never found a problem to solve. VC community has had a role to play in that. On the one hand, they would call iPhone a "just some phone that doesn't even have buttons"... (Watch this hillarious video to see what I mean). On the other hand they would happily fund yet another sardine in a packed can. That causes blurred vision when you cannot see the forest for the trees.

Looking at such "success" story as Monitise, it's easy to imagine that the banks would be falling over themselves to adopt some "next-gen enabling layer". Dream on! Monitise was about some (political) connections and lucky timing, not about some space-age innovation or unique technology.

Likewise, PayPal is about risk management first of all, and (related) customer service. Payments themselves are no longer on the agenda as such (let alone any disruption). There is little true innovation at PayPal - the geometric wars ("square" vs "triangle") is a good example of how things happen there. Yet, that doesn't stop PayPal from being one of the industry leaders.

Coming back to the subject of FinTech Road Show, one of the companies which did impress me was Virtual Piggy. They are solving an interesting (and pressing) problem for a compelling (and largely untapped!) market. We did look at that market in the past, but couldn't see how to take a bite. Time to dust off that file and had another brainstorming session or two...