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FiBD: The FinTech Bullshit Detector

I’ve been wondering for a while how so many companies can be starting up something in the same space, and how are they surviving?  The reason for mentioning it is that we keep hearing these numbers around how many billions are being invested in FinTech, bitcoin, blockchain and such like, and yet I cannot see the unicorns.  Well, not many anyway.  How many can you name?

A couple of years ago there were 84, according to Jim Bruene on the Finovate blog, and yet now?  OK, so there’s a raft of them in China, but then China is reinventing the game.  In the States, there’s Stripe and Square … there was and is Lending Club, but some say it has lost its way.  There are a few more, sure, but it’s not a big list.

Then there’s the blockchain bit, and not a single unicorn there yet, unless you count bitcoin the currency.

This slightly concerns me as you would imagine there would be more breakout firms by now.   After all, it’s over a decade since the FinTech revolution began – I personally place my first FinTech firm as Zopa, which launched in April 2005 – and the market is still nascent.  Equally, for every firm that has broken out, there are dozens that have not.

How many FinTech failures are there?

Again, there was the notable implosion of Powa Technologies due to bad management, but how many others are there that you don’t hear about?   And am I just finding this question rising because I meet so, so, so, so many new start-ups with bright ideas and big ambitions?

Now don’t get me wrong. I haven’t turned into a bear on the FinTech scene.  No, I’m still bullish, but I am getting to the point that if anyone else comes up to me and says we’ve got this great solution for KYC or we’re doing things the banks cannot even imagine or this is going to be the most disruptive software you’ve seen yet or this is the next bitcoin, I’m going to scream.

That is why I’ve invented the FinTech Bullshit Detector, FiBD for short.

It works the same as buzzword bingo, and sits in the back of my mind whenever I hear a pitch.  The buzzword bingo terms in the pitch must include at least three of the following:

  • Disruption
  • Open
  • Breakthrough
  • Gamechanger
  • Innovative
  • Millennial
  • Leverage
  • Next Generation
  • Platform
  • Legacy
  • Digital
  • Democratisation
  • Anything … as-a-service
  • Marketplace

In fact, our good friends over at Leveris have already generated one (thanks to @IamSMoloney).   Here’s a few examples of what they came up with:

Bitcoin crypto-ecosphere incubates API-friendly functionality
Full-service remote server stack integrates Gen Y millennial crypto spend
Neobank disintermediation offers external innovation in return for cashless payment
Oooooooooo … it’s enough to make you bite your fingers off.

So, now you know that if you pitch to me and I say: you’ve been FiBD, that you just reached my point of least interest.

OK, let’s get on with the day.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Kurt Gilman

    It’s something I’ve been thinking about a lot too. The only obvious difference I can think of between financial services and other industries that have been disrupted by technology is that in FS the incumbents are keenly aware of the challengers and the threats they pose. Other industries seem to have been caught unaware or unable to substanitally engage with the growing threat. In their ’embrace’ of these new technologies through lengthy pilots, consortia or outright acquisition of companies or talent the old guard has effectively stalled much of the momentum. I speculate that until there are viable financial ecosystems that circumvent the existing ones, this trend will continue. Once the bitcoin, ethereum or TBD ecosystem matures to where people outside the industry understands and uses it, there will likely be a mad rush for the incumbents to remain competitive.