Mobile Payments was ‘enriching’ experience, and
I think FinTech industry is just too cool!
I have
not written for a while, and there is a reason for it. I have been heads down
on many cool projects and have been focused on consuming information and building
a knowledge base. And as I transition to my next adventure, I would like to
reflect on an amazing experience in Mobile payments world. I have dedicated a lot of time in
understanding payment landscape, which is enormously complex and fragmented.
With Mobile payments on the rise as a disruptor, the landscape does not get any
simpler, with low barriers to entry and push from many Silicon Valley
disruptors there is never a dull moment. In this journey I also discovered
several interesting adjacencies including remittances, P2P Payments, block
chain technology, Cyber currencies and FinTech (financial technology) to name a
few with a whole set of new business models emerging to disrupt which was once
known to be a fairly mature industry. The disruption is again driven by not
only by the usual silicon valley suspects like square, PayPal, Ripple and
likes, but also new emerging set of FinTech players in the Fintech Hubs in NY,
London, and Toronto.
What is
so fascinating to me is the convergence of technology, financial principles and
relentless drive from a few to disrupt a highly regulated industry. So let’s take a closer look. Wharton Fintech
– a student led body defines FinTech as - an economic industry composed of
companies that use technology to make financial systems more efficient. This
implies that the financial system be it payments; money transfer, remittances etc.
did have inefficiencies. These ineffective manifested itself in terms of
complex ecosystem relationships, inter/intra bank partnerships, cross border exchange
fees, interchange fees and time. FinTech in my findings are not only trying to
disrupts the existing business models by creating new values for the end consumers
but also paving the way for other adjacencies such as new markets for loan processing,
captives, vendor, equipment and inventory finance etc. matching market makers
and market seekers for the best possible outcomes which benefits the industry
and consumers alike. After shaping
every aspect of our lives from the way we communicate, socialize, buy, sell and
even find love, I think FinTech which are enabled by technology, a strong
backing from silicon valley and VC funding is poised to disrupt an industry
that was mired with complexity, rules, regulations and in some cases controlled
Oligopoly – and the big players are not only aware but actively investing into
incubator projects to claim their share.
As I understand the
interrelationships between these complex and continually evolving industry
landscape, I try to pin the foundational technologies that make this disruption
a possibility. While exploring
foundational technology for mobile payments, in my post on Design imperatives
of Mobile Payments solution I described the fundamentals of Secure Engagement
as a primary foundation. Where Secure Engagement implies that the
technology should be mostly invisible, with a focus on consumer adoption and
scale for sustained growth and usage. With focus on consumer adoption which may
manifest in form user interface design, better back end integration with system
of records, optimized performance and use of contextually relevant mobile
services, security should be embedded in every aspect of the design. Security
design considerations are particularly important as we design a Mobile Payment Solution,
as Trust is single most important currency, which will enable rapid adoption
and protect and establish long-standing consumer relationship.
Similarly
I think that concepts around distributed application platform that enables and support
- trust systems where decentralized autonomous entities can exist and transact.
The role of the system would link the verified, trusted entities to engage in a
business contract that is not only mutually beneficial, fast but also conforms
to regulation and enforceable by law. This concept relies on a decentralized
application system that is capable of processing digital assets and enforcing
smart contracts. Digital assets can
include (but not limited to) cyber currencies, generally accepted financial
instruments, things of value that can be digitally exchanged, and a smart
contract that adheres to the established rules and regulations. This will
enable, not only confidence in the exchange system but also enable a platform
for regional and cross border intermediation. In essence FinTech are shaping
the finance sector like Internet changed the creation and consumption of
information. Which only means that all the innovation in this sector will
impact the way we do business, negotiate contracts, make payments, manage wealth
and exchange goods and services.
In
addition to learning in-depth the systems, regulations, legal framework around
Mobile Payments and its adjacencies I also learned a lot of valuable lesson
around business. More specifically business of new product, new services and
risk associated with such an initiatives. I also think vision and courage
together are an important element of any new endeavor. Regardless of data
collected from analyst reports, Market intelligence, market data insights and
opinion of pundits – it is courage that is equally important that drives the
success of a new venture. Fortune favors the bold – I have learned that staying
committed to not only making right investments but also have an appetite to
take risks is vital for sustainable focus. There
is no such thing as risk free investment, especially if we are expecting high
rate of return and glory of innovation. There is also a lesson in driving
organic growth where we not only develop industry specific expertise, skills
and leadership trait but also foster a culture of ownership, risk assessment
and above all learning to deal with failures. The satisfaction of seeing a
vision coming to fruition is priceless.
As I
begin my new journey in holistically understanding the components and market
dynamic around Cloud - which is surrounded by commotion of many value added
services and rich eco system of APIs and programmable web, my role in next few
months will be to absorb all facets of business and technology that surrounds
Cloud (Iaas, PaaS, SaaS and more…). I plan to immerse myself in learning the
impact and best route to maximize the promise of cloud.
Stay Tuned…
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