the creative destruction of finance

The Creative Destruction

of Finance

Paul Barter

VP Research Paul.Barter@T4G.com

Jeff DeChambeau

Senior Analyst Jeff.DeChambeau@T4G.com

Presents

Late ’20s

Good health

Good credit

Entrepreneurial

No real assets

Late ’50s

Good health

Good credit

Preparing to retire

Non-trivial assets

A bit about us (from your perspective)

Jeff’s historical financial services options

Today

Earth formed

100,000 B.C.

0 A.D.

1980

1400

1800

20,000 B.C.

Abstracted,

systematized,

and centralized

trust.

Giovanni di Bicci de' Medici

Whose

trust?

Flow of cash Interest rate

This brings

us to today.

Basic assumption

of finance

Capital is

constrained

‘The world will be awash in

nearly one quadrillion $ of

cheap capital by end of

decade’

“Banks, in particular, seem

beset by boredom,

unenthusiastic about actually

making commercial loans, as

many small and medium sized

businesses will attest.

This reluctance is likely to

erode banks' franchise

permanently, as scores of

alternative lending entities are

being created to fill the void.“

Should you take

these competitors

seriously?

What’s going on?

Why does it

matter?

Electricity is a

General-Purpose

Technology

1. Invention

2. Expansion

3. Innovation

General-Purpose

Technologies (GPTs)

Information &

Communication

Technology

(ICT)

Invention Expansion Innovation

*

*not a real book, yet.

What are some

financial services?

Loans & Deposits

Money transfer & Payments

Investments & Returns

Insurance

Loans &

Deposits

“PayPal could quite quickly become the largest consumer bank in the world.

You just need to take away the reasons that people remove money from the PayPal account.

And then it’s like, cool, why not just use it for everything?”

Payments

& Transfers

Which narrative

should you believe?

Investments and

Returns

Angel networks

Incubators

Micro VC

Crowdfunding

Nascent HNW portals ? ?

Insurance

Where is there

disruptive innovation?

Loans & Deposits

Money transfer & Payments

Investments & Returns

Insurance

What about the giants?

A brand for a company

is like a reputation for a

person. You earn

reputation by trying to

do hard things well.

We see our customers as

invited guests to a party, and

we are the hosts. It's our job

every day to make every

important aspect of the

customer experience a little bit

better.

This product is listed on your site as containing 2 tubs, each weighing 3

pounds and 4.9 ounces, for a total weight of 6.6 pounds.

However, the product has been downsized by the manufacturer and now

consists of 2 tubs, each weighing 2 pounds and 10.3 ounces,

for a total weight of 5.28 pounds.

This is a reduction of 20%, which is quite large. I'm not

sure what to do here, as I have already opened

one of the tubs. Should I proceed with

a return and attempt for a refund,

and will the listing/price

be adjusted?

—“Bill”

Hello,

I'm sorry to hear about the problem with

your Sour Power Strawberry Belts, 150-

Count Tubs (Pack of 2).

I've requested a refund of [20% the

purchase price] $5.88 to your credit

card.

I hope this solution works for you. We

look forward to seeing you again soon.

—Amazon

Your margin is

my opportunity.

425,000,000

800,000,000

What about the giants?

They have completely

different mentalities,

stakeholders, and

profit expectations.

They also have…

$60bn $160bn

What if…

+

+

+

Where is there

a real threat?

Loans & Deposits

Money transfer & Payments

Investments & Returns

Insurance

How

can you

thrive?

Track the competition.

Focus on experience.

Be everywhere.

Test, track, and iterate.

And finally,

don’t forget:

Go back to basics.

Obsess over customers.

Shoot for the moon.

113

What can we

do to help you?

Thank you!

Jeff.DeChambeau@T4G.com

Paul.Barter@T4G.com

@T4G

T4G.com