Historically, when looking for opportunity in the financial industry where technology can have the greatest impact — for investors and entrepreneurs — the best place to start has been with one of our oldest institutions: banks. However, while critical to our economy, banks are generally inefficient, have high fixed costs and don’t exactly elicit happy thoughts from the average consumer. It’s for these reasons, among others, that the biggest opportunities in the financial world revolve around the disintermediation of these banks and core financial services.
Given this backdrop, it’s not hard to imagine that a majority of the people in the U.S. could be “banking” with startups, in one form or another, in the next three to five years. It’s been happening for some time, but the pace and volume of business taken away from banks by startups in the last few years have been significant — and this trend will continue to grow.