Will the finance industry embrace the transformative power of breakthrough technologies to build a more resilient and inclusive financial ecosystem, or risk being caught off guard again in the next financial crisis?
Emmanuel Daniel, global thought leader on the future of finance, thinks the industry still has the window to rejig to leverage emerging opportunities from breakthrough technologies.
“The iOS and Android application development platforms made mobility an essential component of all industries. But while these monumental changes were taking place in the technology world, the finance industry was still caught up nursing its wounds from 2008,” says Emmanuel Daniel
In 2008, while the US banking industry was quickly slipping into its worst-ever mortgage-driven crisis, the finance industry was too busy to notice the emergence of breakthrough technologies that would soon revolutionize society in fundamental ways.
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In 2008, banking regulators were still using capital adequacy models developed in the aftermath of the 1984 savings and loans crisis to tame a new crisis, this time involving banks trading in esoteric instruments with no underlying assets. The advent of Bitcoin added a new technology-based asset class which would introduce decentralized finance 10 years later, but hardly received any attention at that time. It was clearly a mismatch, but the industry could not think beyond its own limits.
Daniel goes on to say that, “Innovation often comes very late to finance. As recently as 1998, the US Securities and Exchange Commission (SEC) debated whether bulletin boards should be deemed as exchanges because they simply offered to trade. When authorized exchange-issued mobile phones were allowed on the NYSE in 2003, they differentiated players who had access to phones on the trading floor from those who did not. Even the humble telephone could technically be considered a ‘fintech’ development of its day.”
Daniel is listed as a top 10 global influencer in the “Fintech Power50” list for 2021 and 2022. He is also a global entrepreneur, the founder of platforms such as The Asian Banker and Wealth and Society, through which Daniel has had extensive contact with leaders in banking and finance around the world. His new book, “The Great Transition: The Personalization of Finance is Here,” has already received rave reviews from Barney Frank and Richard Sandor on his insight into the personalization of finance.