David Craig, who leads the FinTech business for Thomson Reuters has an interesting post out. You can read it here: http://tinyurl.com/qe7rl5l.
Craig is a smart guy and he makes several quite valid points about the opportunity for someone to use technology to disrupt the B2B FinTech industry in ways similar to that of Uber and Airbnb. But, so far I haven’t seen any of the big vendors who are doing so. I’m not sure that any of them yet “get it.”
Firms such as Uber and Lyft in the taxi industry, and Airbnb and others in the hotel industry are using technology not only to “disrupt” an industry but also to displace incumbents who stubbornly refuse to see the gross inefficiencies in the industries that they are part of. If they don’t see the inefficiencies how can they possibly be expected to use the opportunities afforded by modern technology to fix them.
Uber and Airbnb saw the big picture. They saw an opportunity to bring efficiency to highly inefficient markets. Now, they are trying to build themselves into new market leading behemoths not only by using technology to address the inefficiencies but also by building in the network effect. If you want to disrupt the big boys you need more than just technology. You must see the big picture, have a disruptive solution and then rapidly build scale.
The B2B FinTech world has some very gross inefficiencies. The biggest single source of friction is the fact that the B2B FinTech industry forces institutional users to be general contractors – coordinating among way too many subcontractors. There’s still plenty of opportunity for one or two of the current market leaders to themselves become the disruptors of B2B FinTech, but for that to happen they need to rely on more than the opportunities afforded by the latest technology – although that will be important – they also need to provide much more complete solutions. And then these market leaders need to not let those solutions sit dormant on the shelf. Like Uber, like Airbnb, they need to push out the new holistic solutions aggressively. The market leaders can’t simply assume that because they are large, the world will be the path to the door. It never works that way. Many of the biggest players think they get it. In the main, I don’t think so. They don’t act as if they see the gross industry inefficiencies that they are part of – and when they do have potentially disruptive technology they don’t market it aggressively enough possibly in fear of cannibalizing their own businesses. The combination makes them vulnerable.
We welcome your comments.