Video

#SaxoStrats
Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 22 October 2014 at 16:08 GMT

#TradingDebates: The fintech generation gap

  • Fintech is attracting billions and expanding rapidly
  • Capital access and talent make London a magnet
  • City doesn't understand new generation
By Clare MacCarthy

The fintech sector has seen quite explosive activity over the last year and much buzz has been generated about whether or not it represents a threat to the established financial services industry. 

According to Gerald Brady, managing director at Silicon Valley Bank, some $11 billion has been ploughed into fintech startups and about one-third of this went to companies based in the UK.

London's attraction, says Brady, is due to the ease of access to capital in the City as well as to an abundance of young, creative and go-getting people. However, this go-getting bank of talent is also a major problem for the established financial services industry, says Julian Skan, a director at Accenture.

In an impeding generational shift, billions of dollars of wealth are due to be shifted from the baby-boomers to their offspring — the quite different sort of people who belong to Generation X and Generation Y. Traditional institutions, Skan says, don't quite understand this generation's adherence to new parameters such as social purpose and renewables.

One recent example was an organic vineyard in Sussex which had a top-up equity issue. However, a parallel hybrid crowdfunding issue that was massively oversubscribed, neatly illustrating the incoming generation's determination to put money where their loyalties lie. The second manner in which traditional financial institutions must improve is learning how to respond to the needs of this new cohort. "They need to be responded to in the way that they want," says Skan.

Ian Morgan, director of financial services at Google UK, also believes that the generation gap must be overcome to allow the City reap the benefits of this extremely well-educated and creative generation. "Generally, financial services are very conservative and risk averse," he points out. 

"There are some very bright minds in the industry who come up with brilliant ideas but then they run into a brick wall of barriers when every new innovation needs approval from conservative boards," Morgan added.
city
 





Bridging the gap is essential. Photo: Thinkstock

Clare MacCarthy is Deputy Editor of TradingFloor.com


Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail