The US presidential election and Brexit vote were indicators of strong anti-establishment feeling among voters. There are similar signs in many other western countries. Financial institutions are strongly linked to the establishment. As a small detail we can think of how the speeches of Hillary Clinton at Goldman Sachs were harmful for her bid. The establishment has also been slow to make things better, and it is definitely a time in the finance sector to act to again earn the respect of customers and people.
The Grow VC Group was started in 2009, our first business was the worlds first equity crowdfunding service. It was the time of the finance crisis. It was the time people really started to lose respect for banks and finance institutions. Or should we say, they started to hate banks and bankers. During the last 7 years we come a long way from the first crowdfunding platforms to much bigger revolution in with digital finance services and fintech.
Now we are at the point that these new services start to have an impact on all finance institutions, including banks. Many digital services, from payment processing and money transfer to lending and wealth management, already take business and profit from banks and other finance institutions. At the same time finance institutions have also started to plan how they can utilize fintech and digital services better.
We have now talked about hybrid digital finance. It means how to utilize fintech in the traditional finance institutions, build new finance instruments based on fintech, and find models how fintech and traditional finance services can amplify each other. You can read more about this, for example, from this presentation.
At the same time it is fundamental to understand it is not enough to utilize new technology to re-earn the respect of people. It is to develop the whole business, processes, pricing and especially attitude. Services and pricing must be transparent, companies must respect all kinds of customers and the finance sector cannot behave like a private club. The attitude change is most often the most difficult to pull off. And it is also about communications, it is not enough anymore to broadcast fancy marketing campaigns, it is to interact with people.
Open API ecosystem sounds quite technical, but it is actually a fundamental part of this. Its philosophical idea is that all parties, big and small, can easily work together, complement each other services, innovate new services, offer better transparency and competitive pricing. Finance services cannot be anymore huge (or ‘yuge’ as Trump would say) black box.
We have seen changes in lending and investing services, also areas like online wealth management services and real estate crowdfunding are emerging. We can also expect this spread to many other services from digital investment banking services to automated digital funds and how LPs can make investments in new ways.
We hope all finance companies, from small fintech startups to big banks, can join us to change the image and respect of the finance services. We hope it is not a demerit in the future for a politician or anyone to talk or work with finance companies. And especially we hope people can feel finance services are to serve and help them in their life.
Good finance services should be something everyone is proud of. They are an enabler for economies and businesses to grow. We now have all tools to build this new finance sector, we just need the right attitude, hard work and execution to make it happen.
Est. 2009 Grow VC Group is the global leader of fintech innovations, digital and distributed finance services. Our mission is to make the finance services more effective, transparent and democratic. The Group includes leading fintech companies in their own areas.
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