The
Creative Destruction
of Finance
Paul Barter, @barterpaul, paul.barter@t4g.com
VP Research at T4G, Tech Strategy Prof at Schulich, Venture Advisor at MaRS

*not a real book, yet.

Late ’20s
Good health
Good credit
Entrepreneurial
No real assets
Late ’50s
Good health
Good credit
Preparing to retire
Non-trivial assets
Imagine 2 People
(from your perspective)

Abstracted,
systematized, and
centralized trust.
Giovanni di Bicci de' Medici
What is a Bank?

Whose
trust?

Flow of cash

This brings
us to today.

Capital is
constrained
Basic assumption
of finance

‘The world will be awash in
nearly one quadrillion $ of
cheap capital by end of
decade’

Basic assumption
of finance
Incumbents are
untouchable

“There’s a big role for Silicon Valley-style scorched
earth entrepreneurship on Wall Street right now, and
the people most likely to innovate are newcomers to
the industry who have no real stake in the portions
of it that need scorching”

“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 we take
these competitors
seriously?

General-Purpose
Technologies (GPTs)

The next
fortune.
What’s a general purpose technology?

What’s going on?
Why does it
matter?

1. Invention
2. Expansion
3. Innovation

Information &
Communication
Technology
(ICT)

Invention Expansion Innovation

*
*not a real book, yet.

What are some
Financial Services?
Money transfer & Payments
Loans & Deposits
Investments & Returns
Insurance

Payments
& Transfers

“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?”

Loans &
Deposits

Which narrative
should you believe?

Investments and
Returns

Insurance

Where is there
disruptive innovation?
Loans & Deposits
Money transfer & Payments
Investments & Returns
Insurance

What about the giants?

Your margin is
my opportunity.

425,000,000
800,000,000

What about the giants?

$60bn$160bn

What if…

+
+

Flow of cash

Where is there
a real threat?
Loans & Deposits
Money transfer & Payments
Investments & Returns
Insurance

How
can incumbents
thrive?

Track the competition.

Accelerate

Be everywhere.

Test, track, and iterate.

And finally,
don’t forget:

Go back to basics.

Shoot for the moon.