Fintech (financial technology) is booming. In the startup community, everybody is talking about the new cool kid in town stealing business from the establishment. You can store money on a mobile-app-bank, invest or lend directly into promising business all over the world. Why not get your own cryptocurrency and buy drinks at your local hipster coffee place? You can even order pre paid cards for your children tracking their spending and allowance. Banks are going down and everything is changing! At least that is what I thought until a recent experience allowed me to have a sneak peak behind the curtain. Here is the story: Last year I invested in a private company through an investment platform and got lucky. 6 months after my investment, the company was acquired by an established player and I got my first startup exit. Hurray! I was super excited to follow the exit-process and what would happen after the company was sold! My excitement, however, was quickly put on hold in utter surprise of the process that followed.
Here is what happened: I received a letter from the company solicitor informing me that the company had accepted an acquisition offer. Attached to the letter was a document with three different options for payout and instructions to tick off one of the options and send the document to the sender. After posting my letter, I waited for a couple of months without any confirmation to whether or not my response had been received. Then, one day I got a cheque in my post-box which I could take to my bank and deposit to my account. See the irony? I had invested in a fantastic startup through the internet, only to end up with a piece of paper in my hand which I had to walk to the bank. I mean who does that these days? - sends letters and walks into a bank?
Everyone wants immediate payouts. Nobody wants a cheque!
A picture of my cheque sent by UPS express
The experience made me think. Never has there been more focus on fintech solutions challenging the old established players. But in an example like this, you notice that the World is the same as before. There might be shiny sprinkles on top in the form of a high profiled fintech startups, but when you scratch the surface the ones benefiting are still the guys which everybody wants to disrupt: banks, lawyers, and the postal services!
If we want to truly change the financial ecosystem. Technology needs to completely bypass current players and existing logic. Luckily, there is hope. New companies like FunderBeam, Chain and Friendsurance are challenging the very structures that were established centuries ago.
Like the famous quote goes:
‘We must accept the end of something in order to begin to build something new’