When talking about fintech everybody is coming up with Uber“isierung“ of the financial industry. Fair enough, but I think there is a much better analogy. The music industry was disrupted several times in a digital context:
- The invention of the CD was not completely disruptive but the first mass market digital product
- With the PC, the Internet, MP3, and finally Napster the old-established players were in considerable danger
- Then Apple came with the legal download which was fairly disruptive I would say
- Finally (at least so far) Spotify and streaming in general are without doubt quite a headache for some people in Cupertino who underestimated this new way of music consumption, which disrupts again
What does that piece of history tell us?
- All those changes were enabled by new digital technologies
- Change happens fast and constantly
- There were big companies from a different industry disrupting the music industry, as well as small startups and even peer-to-peer protocols in almost any order
- Of course the process of making and recording music involves nowadays also lots of digital equipment, but if you have creative talent and potential you are the only one in the industry still doing almost the same as your colleagues (or maybe even yourself) were doing thirty years ago, though with quite different patterns of income streams
What can the financial industry learn from their musical counterparts?
- Be aware that the new kids on the block (big or small) will give direction
- Think sooner rather than later about how you want and can deal with everything that can be digitally automated
- With digital innovations, disruption is lurking around the corner
- If you are really good and creative in a thing which cannot easily be automated and digitalised, put all your effort in that. These could be non-standard investment advice, new investment product development, investment research and analysis, M&A, corporate advice on dept and equity etc.