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LBS – Disruptive FinTech: fear or future?

Are we resigned to a future where disruption rather than stability is the new normality? We saw what Amazon did to record shops and booksellers. We are seeing Uber decimate the cab industry. This fate, presumably, awaits every industry and every occupation.

An efficient finance industry is at the core of a productive economy. But the finance industry has many critics, who might well argue that finance needs disrupting. Fintech is the label we give to the explosion of disruptive innovation in finance. This critique provides a useful framework for thinking about its role.

Four broad functions of the finance industry

1. Facilitate payments and transactions processing, which is crucial for trade and economic life more generally

2. Safekeep assets and the creation of capital

3. Enable the sharing of risk through insurance and pooling

4. Intermediate savings, investment and capital raising – getting money from where it is the way it is needed.

Read more on London Business School – Article written by Chris Higson  (14 Jul 2016)