Last week I held a presentation about the Norwegian Fintech landscape and trends at Norges Bank and Simulas CBDC event
. After my talk, Torbjørn Hægeland, Executive Director for Financial Stability at Norges Bank, came up to me and said that he noticed there wasn’t much disruption in my examples. Truth be told, he was right. Despite many predictions and warnings, there hasn’t been a lot of radical change in the Norwegian Fintech market. Mostly there have been minor, incremental improvements and regulatory changes moving things forward.
Since I started helping Skandiabanken create its first responsive online banking solution almost ten years ago, a lot has happened. The last ten years have been more about minor, incremental improvements. Sure new technology has come (and gone), but for most users, there hasn’t been a lot of disruption. It has become easier to pay person to person, more accessible to pay companies, more straightforward to save and access your accounts, easier to apply for loans, and much more. Still, far from the significant disruption we were promised. Why is that?
In my view, there are four main reasons. Firstly, the underlying infrastructure in banking is very complex, consisting of legacy systems that are hard to replace. Secondly, the regulatory environment is very tight, making it hard to experiment or be disruptive. Thirdly, banks have been very good at acquiring or copying successful Fintech startups, making it hard for them to scale up. Lastly, the customers themselves have been quite happy with the existing solutions.
The best example of disruption I have seen is how AI has grown over the last six months. From having some fringe examples to suddenly having believable text-to-image
(and even video
) solutions, AI pair programmers,
and even writing software that helps write texts. If we get a disruption within Fintech in the coming years, I believe it will likely be based on AI advancements rather than on Blockchains. The main reason for this belief? User Experience. So far, I haven’t seen an example of a Blockchain-solution making anything more accessible (or understandable) for the end-users. On the other hand, all the AI examples I’ve seen save people hours.
The overall lesson is that it takes more than technology to create disruption. It takes the right mix of technology, timing, and user needs. (Case in point; the last two sentences were written by an AI)