"disruption" entries

The new fintech: mobile, decentralized, and friction-free

The O'Reilly Radar Podcast: Dele Atanda and Mutaz Qubbaj talk about their startup platforms and the disruption in fintech.

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Learn more about Next:Money, O’Reilly’s conference focused on the fundamental transformation taking place in the finance industry.


In this Radar Podcast episode, I chat with Dele Atanda, founder and CEO of Digitteria, about the disruptive state of the financial tech industry, what he thinks is driving that disruption, and why smart data (as opposed to big data) is going to revolutionize finance. I also talk with Mutaz Qubbaj, CEO and co-founder of Squirrel, about about the Squirrel platform, accelerator programs, and how he views the big disruptors in fintech landscape.

We’ve started an investigation — and launched a new summit, Next:Money — here at O’Reilly to look into the disruption happening in the fintech industry, as burgeoning startups create services and products that threaten to disaggregate traditional finance incumbents. I recently had the opportunity to sit down with a number of fintech startup founders and will be featuring several of those conversations in upcoming Radar Podcasts.

Dele Atanda founded Digitteria, a startup developing sustainable identity and personal data management solutions for both consumers and enterprise. I asked him why the time is ripe for disruption — he pointed to the growing complexity of the landscape and compared the current state of the finance industry to the early stages of the Web:

There’s a significant increase in complexity, and in that complexity there’s a much more detailed and rich ecosystem. Banks, it’s difficult for them to be able to tackle all the ends and elements efficiently, so it’s interesting because it’s almost representative of, it’s lacking the evolution of the Web, but it mirrors it in very many ways. Initially, you had these monolithic sort of applications, or browsers, or services that tried to do lots of things, and then we moved into the mobile era where things became much more siloed and application centric, where you did one thing particularly well. That’s inevitably going to happen in the fintech space. They say that the currency of the industrial era was paper, and the currency of the knowledge era is the electron.

Money is primarily electronic now, so it’s inevitable that there’s going to become this confluence between the Web and finance in that regard. I think, of course, because of security, regulatory issues, and the cultural dimension of money, there’s been a lag and resistance. Now that the Web has reached a level of maturity that it can address those issues, I think that’s inevitable.

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Filing cabinets, GAAP, and the accountant’s dilemma

The inability to take advantage of digital technology is as big a threat to financial organizations as any fintech startup.

Learn more about Next:Money, O’Reilly’s conference focused on the fundamental transformation taking place in the finance industry.

Burroughs_adding_machineThere’s plenty of news about the fintech, or financial technology, sector these days. Hundreds of nimble startups are disaggregating the age-old financial systems on which every transaction has relied for decades. There’s little doubt that this will continue — after all, more than four billion humans have a mobile phone, and 1.3 billion know how to use a Facebook feed, but only a billion are what we’d consider “normally banked.” Something’s got to give, and software is eating traditional financial systems one bite at a time.

But the existing financial industry isn’t just under threat from outside. Many of the processes and institutions of finance have been around for centuries, and their processes are tied to physical systems rather than digital ones. As a result, they’re unable to take advantage of digital innovations easily and remain competitive. Read more…

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9.3 trillion reasons fintech could change the developing world

Modern fintech is going to create formal, standard records about economies where none existed before.

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Learn more about Next:Money, O’Reilly’s conference focused on the fundamental transformation taking place in the finance industry.

A relatively commonplace occurrence — credit card fraud — made me reconsider the long-term impact of financial technology outside the Western world. I’ll get to it, but first, we need to talk about developing economies.

I’m halfway through Hernand de Soto’s The Mystery of Capital on the advice of the WSJ’s Michael Casey. Its core argument is that capitalism succeeds in the Western world and fails everywhere else because in the West, property can be turned into capital (you can mortgage a house and use that money to do something). The book uses the analogy of a hydroelectric dam as a means of unlocking the hidden, potential value of the lake.

But in much of the world, it is unclear who owns what, and as a result, the value of assets can’t be put to work in markets. In the West, we take concepts like title and lien and identity for granted; yet, these systems are relatively new and don’t exist around the world. As de Soto noted in his book, in the Soviet Union, unofficial economic activity rose from 12% in 1989 to 37% in 1994. Read more…

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Here’s why finance is about to be disrupted

O'Reilly's Next:Money event helps business leaders understand the fundamental shifts reshaping finance.

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Learn more about Next:Money, O’Reilly’s conference focused on the fundamental transformation taking place in the finance industry.

Editor’s note: We’re approaching an inflection point in all things “money” — currency, transactions, markets, and capitalism itself. Fundamental changes in the financial industry, driven by technology but with implications for every business and government, are beginning to manifest, bringing both disruption and opportunity. We created O’Reilly’s new conference, Next:Money to help business leaders understand and act on this shift. Below, Next:Money program chair Paul Kedrosky lays out the forces and patterns that are reshaping the financial industry.


Finance has the three main characteristics of an industry likely to be transformed by technology:

  1. It traffics in bits, not atoms.
  2. Its services are often delivered remotely.
  3. There is little need for human contact.

Unlike other sectors with these characteristics — e.g., media, advertising, and travel services — finance hasn’t been disrupted. Despite huge technological change and a series of financial crises, the league table of the largest financial firms today, both in the U.S. and around the world, remains much the same as it has always been.

Granted, the $1.2-trillion U.S. financial services industry isn’t homogenous. Its main components — banks, brokers, asset managers, markets, payment networks, insurers, and credit card companies — are very different, and have seen widely varying degrees of technology-induced change. In no sense, however, is this industry as transformed by new companies and new business models as one would expect, given its disruption-ready characteristics.

So, why haven’t entrepreneurs transformed finance? There are (at least) five reasons: Read more…

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From Industrialism to Post-Industrialism

Leveraging the power of emergence to balance flexibility with coherency.

Download a free copy of Building an Optimized Business, a curated collection of chapters from the O’Reilly Web Operations and Performance library. This post is an excerpt by Jeff Sussna from Designing Delivery, one of the selections included in the curated collection.

In 1973, Daniel Bell published a book called “The Coming of Post-Industrial Society”. In it, he posited a seismic shift away from industrialism towards a new socioeconomic structure which he named ‘post-industrialism’. Bell identified four key transformations that he believed would characterize the emergence of post-industrial society:

  • Service would replace products as the primary driver of economic activity
  • Work would rely on knowledge and creativity rather than bureaucracy or manual labor
  • Corporations, which had previously strived for stability and continuity, would discover change and innovation as their underlying purpose
  • These three transformations would all depend on the pervasive infusion of computerization into business and daily life

If Bell’s description of the transition from industrialism to post-industrialism sounds eerily familiar, it should. We are just now living through its fruition. Every day we hear proclamations touting the arrival of the service economy. Service sector employment has outstripped product sector employment throughout the developed world. 1

Companies are recognizing the importance of the customer experience. Drinking coffee has become as much about the bar and the barista as about the coffee itself. Owning a car has become as much about having it serviced as about driving it. New disciplines such as service design are emerging that use design techniques to improve customer satisfaction throughout the service experience.

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Four short links: 23 December 2014

Four short links: 23 December 2014

Useful Metrics, Trouble at Mill, Drug R&D, and Disruptive Opportunities

  1. Metrics for Operational Performance — you’d be surprised how many places around your business you can meaningfully and productively track time-to-detection and time-to-resolution.
  2. Steel Mill Hacked — damage includes a blast furnace that couldn’t be shut down properly.
  3. Cerebros — drug-smuggling’s equivalent of corporate R&D. (via Regine Debatty)
  4. Ramble About Bitcoin (Matt Webb) — the meta I’m trying to figure out is: when you spot that one of these deep value chains is at the beginning of a big reconfiguration, what do you do? How do you enter it as a small business? How, as a national economy, do you help it along and make sure the transition happens healthily?
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Four short links: 17 June 2014

Four short links: 17 June 2014

Decentralised Consensus, Disruption Critiqued, Digital Reputation, and Stuff That Matters

  1. Erisa platform which allows developers and users to deploy consensus driven applications which rely on decentralized architecture and a consensus driven blockchain database backend. Open source (modified MIT).
  2. The Disruption Machine (New Yorker) — long detailed critique of the “disruption” hypothesis of Clayton Christensen, particularly questioning the case studies cited in The Innovator’s Dilemma.
  3. Web Reputation Systems and the Real World (Randy Farmer) — Don’t cross the streams. Good digital reputations should always be context-limited: the nature of the inputs should constrain the use of the reputation scores that are output.
  4. Bill and Melinda Gates Commencement Speech (Quartz) — excellent urging to work on stuff that matters. The pessimists are wrong in my view, but they’re not crazy. If innovation is purely market- driven and we don’t focus it on the big inequities, then we could have amazing advances and inventions that leave the world even more divided.
Comments: 3
Four short links: 30 January 2014

Four short links: 30 January 2014

In-Game Economy, AI Ethics, Data Repository, and Regulated Disruption

  1. $200k of Spaceships Destroyed (The Verge) — More than 2,200 of the game’s players, members of EVE’s largest alliances, came together to shoot each other out of the sky. The resultant damage was valued at more than $200,000 of real-world money. […] Already, the battle has had an impact on the economics and politics of EVE’s universe: as both side scramble to rearm and rebuild, the price of in-game resource tritanium is starting to rise. “This sort of conflict,” Coker said, “is what science fiction warned us about.”
  2. Google Now Has an AI Ethics Committee (HufPo) — sorry for the HufPo link. One of the requirements of the DeepMind acquisition was that Google agreed to create an AI safety and ethics review board to ensure this technology is developed safely. Page’s First Law of Robotics: A robot may not block an advertisement, nor through inaction, allow an advertisement to come to harm.
  3. Academic Torrentsa scalable, secure, and fault-tolerant repository for data, with blazing fast download speeds built on BitTorrent.
  4. Hack Schools Meet California Regulators (Venturebeat) — turns out vocational training is a regulated profession. Regulation meets disruption, annihilate in burst of press releases.
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Four short links: 20 November 2013

Four short links: 20 November 2013

Disruption, Telepresence, Drone Mapping, and TV Malware

  1. Innovation and the Coming Shape of Social Transformation (Techonomy) — great interview with Tim O’Reilly and Max Levchin. in electronics and in our devices, we’re getting more and more a sense of how to fix things, where they break. And yet as a culture, what we have chosen to do is to make those devices more disposable, not last forever. And why do you think it will be different with people? To me one of the real risks is, yes, we get this technology of life extension, and it’s reserved for a very few, very rich people, and everybody else becomes more disposable.
  2. Attending a Conference via a Telepresence Robot (IEEE) — interesting idea, and I look forward to giving it a try. The mark of success for the idea, alas, is two bots facing each other having a conversation.
  3. Drone Imagery for OpenStreetMap — 100 acres of 4cm/pixel imagery, in less than an hour.
  4. LG Smart TV Phones Home with Shows and Played Files — welcome to the Internet of Manufacturer Malware.
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Six disruptive possibilities from big data

Specific ways big data will inundate vendors and customers.

Disruptive PossibilitiesMy new book, Disruptive Possibilities: How Big Data Changes Everything, is derived directly from my experience as a performance and platform architect in the old enterprise world and the new, Internet-scale world.

I pre-date the Hadoop crew at Yahoo!, but I intimately understood the grid engineering that made Hadoop possible. For years, the working title of this book was The Art and Craft of Platform Engineering, and when I started working on Hadoop after a stint in the Red Hat kernel group, many of the ideas that were jammed into my head, going back to my experience with early supercomputers, all seem to make perfect sense for Hadoop. This is why I frequently refer to big data as “commercial supercomputing.”

In Disruptive Possibilities, I discuss the implications of the big data ecosystem over the next few years. These implications will inundate vendors and customers in a number of ways, including: Read more…

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