The control of finance is slipping greasily from the hands of the banks and institutions
Question: What do banks, mainstream lenders and traditional finance mechanisms all have in common?
Answered in a moment…
You see one of the biggest challenges most investor/Entrepreneurs have faced through the crash/recession post 2008 is access to finance. Funding for deals and start up business. Perhaps you did too?
But NOT because it isn’t there –
Because they didn’t ‘move with the money.’
Peer-to-peer lending, equity crowdfunding, invoice trading, pension-led funding and straight ‘friends & family’ lending have all shaken up the finance world. They’ve provided real, contrarian Entrepreneurs with a wider range of finance options.
All while the old guard are still waiting for same-day remortgages and begging the big banks
The real finance advantage isn’t just in keeping your credit clean and gaining experience, but in moving with the money when it moves the quickest. Spotting the innovation and getting in while the terms are in your favour.
The internet wreaked innovative havoc with existing Goliath institutions; everything from music publishing to betting and now to banking. The past decade has seen traditional high street banks and lenders come under sustained attack.
Internet banking meant the speed of money movement increased to fibre optic speed. Costs and rates could drop. First, fast movers win, the rest lose market share while Tesco & Sainsbury’s take market share without high street presence.
- Payday lenders such as Wonga uses smart technology to make rapid lending decisions. Peer to peer lending platforms such as Zopa, & Funding Circle create safer, lower margin environments for individual lenders getting low interest. Crowdfunders like Crowdcube, Platform Black pool the money from the crowd as the way money moves, moves.
- Bank of Dave is causing a stir. Bitcoin is making its presence felt. Wearbles are speeding up the contactless movement of money.
- iZettle & Square help individual proprietors, most of whom considered themselves too small to take credit cards, or couldn’t get card machines from the mainstream banks. Take money on your iPhone.
- Xoom helps immigrants wire money home to their families. Prepaid debit cards like Netspend, Greendot and AccountNow all target the underbanked, gaining market share by helping the people the banks reject.
So the answer to the question:
What do banks, mainstream lenders and traditional finance mechanisms all have in common?
Each is becoming a ‘victim’ of big disruption.
Paypal blazed the trail and the floodgates are opening up.
Disruptive financial innovation is taking over. Banks are genuinely scared of new technology changing the way money moves and the financial models of the companies behind them. Banks’ margins are being challenged and thinned.
The ‘non-bankers’ are swelling in size. They do not (yet) face the same regulatory burdens as banks. They’re lean and fast.
But what does this mean to you?
The biggest opportunity to ‘cash in on cashflow’ comes from anything that scares mainstream banks & banking systems. The easier money is in between disruption and innovation, where regulation, control and mainstream awareness haven’t caught up.
The great irony of the post crash clamp/meltdown is that it forced established banks to become safer and more regulated. That very reaction squeezed the foot in the door for the disrupters.
And there’s a lot more to come, you can be quite sure of that.
So how can you take advantage?
Stay on the edge of technology. Welcome the innovation and look into new finance vehicles with an open opportunistic mind. See the opportunity when the old guard or the mainstream get rejected for conventional loans and mortgages.
Early mover investor/Entrepreneurs have taken their cashflow beyond the heights of pre-recession. They’ve adapted and embraced risk. They’ve truly embraced what the ‘Entrepreneurial spirit is; seizing the opportunity first and seeing opportunity in crisis.
The (R)evolution of Finance – will You Cash in or Crash out?
Questions, comments, rants and arguments welcomed below…