Software at the world, will it take over finance completely.
The financial industry makes up a large part of the global economy. Over the past 17 or 18 years, FinTech made tremendous inroads into the sector.
Here is how finance has grown in western countries.
We are on the cusp of seeing the physical being replaced completely by digital. The entire sector is to undergo even greater changes than it already has.
Today, there are questions about where the mega-tech companies fit into the equation. Traditional banks are likely to see a threat from those with better networks. Amazon, Apple, and Facebook cater to hundreds of millions of people. This is more customers than any single bank.
These companies have software platforms that make it hard for the banking system to compete.
The power of software is shown by Robin Hood, the mobile application that came to popularity in a short period of time. Some of the innovations were to be able to buy cryptocurrency, fractional shares of stock and zero transaction fees. This caused many of the discount brokers to match the move.
OUR ADVANTAGE LIES INSTEAD IN GLOBAL NETWORKS, PUBLIC AND PRIVATE CHAINS, AND PROGRAMMABLE, DECENTRALIZED FINANCE.
-Source
Moving roughly 15% of the global economy to open source blockchains would completely change the path of the financial industry. We are already seeing the early stages of De-Fi taking hold on the Ethereum blockchain. At one point, there was over $1 billion tied up on that chain in De-Fi.
It all starts with a cheaper version of a familiar product. Over time, innovation causes the newer product to improve which makes it difficult for the traditional company to compete. This puts even more pressure on the incumbents. to try to maintain their hold. They often resort to legal maneuvers in an effort to avoid elimination.
Once this is shown hopeless, they end up getting swallowed.
The record companies could not compete with Apple services nor could Blockbuster and its physical movies fend off Netflix.
Software trumps the physical every time.
The financial arena is likely to get eaten alive by software. The financial industry is going to see digital products completely eat the existing structures. Larger entities tend to be too slow to adapt.
By the time they realize something is wrong, it is too late.
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Posted via Steemleo
