Disrupting the Disruptors

Over the last few years, headline after headline has been spilling ink on disruptors changing the face of industry. Whether it was Automotive, Cleantech, eCommerce, Publishing, Social Media or today’s favorite – Banking and Finance.

If you take a hard read through history, there were clear and distinct trends about how financial markets were established and nurtured. There’s no doubt that for a society to innovate and evolve, funding is required, and there are many paths to funding. The many paths to funding and investing have taken on a whole new meaning as technology pulled the importance of big data and the connectedness of social behavior in from the shadows.

I think it’s the velocity of this evolution that has caused much of the uncertainty and disheveled executives to bomb when prodded about their latest corporate earnings or business strategy during the last few years. The marbled halls of Manhattan, London, and Paris are now playing a back seat to the Silicon Valley startups communal living and working space. The khaki wearing engineers in their Golden Era have convinced top talent from avoiding and even leaving those hallowed halls to take that left turn in Albuquerque and focus on what Elon Musk and Peter Thiel are saying and doing.

Aside from the brain drain disrupting traditional finance institutions, the contagious investing strategies of Angel Investors and PE funds infected their mutual fund brethren driving capital towards these technology startups that were stealing their fresh talent!

As the global economy slowed, the call to action from the boardrooms echoed around the globe for alternative solutions. Almost overnight a barrage of buzzwords began to puke forth from newsrooms and bars as C-Level executives scrambled to frame a new narrative. They would embrace this change. They would “partner up” with these kids from Silicon Valley. They would ensure continuity of trading.

In other parts of the world, the dramatic shift in finance was going unnoticed by a generation of executives whom either felt content as they neared retirement or adamantly believed having real people do real tasks could still produce a profit, dominated the conversation. In the end, the efficiencies of the algorithms gave rise to the artificial intelligence debate. As cost savings increased, product synergies deployed by these revolutionary platforms forced global governments to take notice.

Aside from the obvious concern of some futurists about the power of artificial intelligence let loose without sufficient controls or the ability of regulators to limit and control algorithms that produced the 2010 Flash Crash, I’m of the opinion that automation, where it makes sense, is a good and evolutionary thing.

Finally, I’ll leave you with a prime example of what I’ve been talking about in this post and on this blog. The Alibaba Group’s money market fund, Yu’e Bao, raised approximately $90bn in less than 12 months, something that took U.S. funds 35 years to achieve. This post isn’t a knock on those funds, but a heads up to the need for a shift in strategy. The key takeaway from this example should be that the millennials are driving the global adoption of FinTech and 60% of them reside in Asia. And lastly, Asian e-Commerce companies have proven to be critical in the global conversation.