I guess, because we are in lockdown, that I find the Olympics quite surreal. Lots of sports and lots of commentary and lots of weird things going on in my head. For example, I started to think about what an Olympics of banking and fintech would look like.
No, I shouldn’t have.
But I did.
So, here we go. The Olympics of Money.
In the auditorium, we find heavyweight banks competing and Deutsche and Barclays are being tested hard by Chase. On the race track, in the fast lane, are the neobanks and challenger banks with NuBank, Starling and Chime achieving the top positions. Meanwhile, over the other areas of the track, are many specialists with Stripe, Klarna, Revolut, Adyen and more doing interesting things.
The thing is, about the Olympics, is that few are competing in many events. They focus on one thing. Maybe or maybe not, but if you do the pentathlon or heptathlon, you don’t win the specialist events. You win the overall.
I really like this idea of thinking about banking and fintech because it plays so well to my regular theme of incumbent banks being too much of a generalist whilst fintech startups are specialists. In banking and fintech, there are 1000’s of competitors. Most do one thing brilliantly well, whilst the old incumbents try and do everything. In other words, an old bank is a pentathlete or heptathlete, whilst the fintechs are sprinters, swimmers, rowers or gymnasts.
When I think about this simile, I start to go down corridors of consideration. A Stripe is a sprinter; an etoro is a swimmer; a Revolut is a triathlete; and a Lloyds is a marathon runner.
Thing is that the metaphor doesn’t work.
It’s a nice one, but it doesn’t work. It doesn’t work because Olympic atheletes change every four years. An Olympic athletes lifecycle is a maximum of twenty years. And yet a bank doesn’t last four years, twenty years or a small time. Banks last forever.
Oh yeah. There’s no Olympics in banking and finance. There’s just the big incumbent firms and the start-ups nibbling at their toes. The start-ups may be faster, fitter, stronger, better, but they eventually become the old. We all do. The Olympics of Money will always result in the boring, big old company winning. Why do I say this? How can I say this? Well …
Imagine you have the Olympics of Money. Each event has bright young things competing. But imagine the whole event is run by the bank. The bank wants all the bright young things to run as fast they can … and then acquire their greatest talent, ideas and views. That is how the Olympics of Money works. The banks and governments run the games, and then take over the winners of the games and their talents.
Cynical? Maybe. Realistic? Yes.
The gist is that the banking system is more like the International Olympic Committee than a competitor. They create the playing ground, the competition and the sport. The players, competitors and sports people compete … and the winners are the organisers. As mentioned, banks are more like governments or countries than companies and competitors. So, let’s run on their fields, swim in their pools and row on their rivers. But should we try to replace the Committee itself?
You can try but probably not recomended #justsaying