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New Models Destroying Old Ones, The Finance Sector is Next | Grow VC > Blog

There are sev­eral early phase com­pa­nies in the finance sec­tor that develop the new web 2.0 era or what­ever the right name is. Why can’t it be as easy as with Pay­Pal to open a bank account and trans­fer money? Why don’t we have a lot of direct invest­ment mar­kets on the Inter­net with­out high man­age­ment fees? Why couldn’t we build an invest­ment group online with our friends and work like an e-fund and diver­sify our investments?

Often the answer is, because the reg­u­la­tors and incum­bent finance com­pa­nies want to keep the old mod­els and pro­tect them. They say it is bet­ter and safer for ordi­nary peo­ple; they don’t trust that ordi­nary peo­ple actu­ally can be respon­si­ble or smart. It was the same before the French rev­o­lu­tion, the estab­lish­ment saw democ­racy as dan­ger­ous when ordi­nary peo­ple could not be trusted to make the right deci­sions. IBM didn’t believe ordi­nary peo­ple would ever need a com­puter, they thought a few com­put­ers for pro­fes­sion­als is enough. And avi­a­tion author­i­ties sup­ported local monop­o­lies and stated that state-owned-airlines offer enough options and are safer.We are now start­ing to see this change com­ing to the finance sec­tor. The tra­di­tional finance sec­tor is really strug­gling. Yet it is not only about money, it is also about how peo­ple per­ceive banks, funds and finance con­sul­tants. Peo­ple are los­ing their trust. Crowd fund­ing plays a part in this devel­op­ment. The foun­da­tion is con­stantly being built, but the rev­o­lu­tion doesn’t hap­pen over night. We as a com­mu­nity, have got a good start and step by step also reg­u­la­tors and tra­di­tional finance com­pa­nies start to under­stand our jour­ney. It is impor­tant to develop the startup fund­ing mar­ket to work well. But at the same time, it is as impor­tant that the invest­ment mar­ket works well.

via New Models Destroying Old Ones, The Finance Sector is Next | Grow VC > Blog.

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