Banking Goliaths must learn to dance with “Digital Davids”
Meyer: dancing lessons for Davids and Goliaths
Partnerships and alliances with innovative digital entrepreneurs will allow the large incumbent banks to adapt and thrive in the new economic ecosystems being created by the mobile and digital revolutions currently changing the industry.
Julie Meyer, chief executive of investment and advisory firm Ariadne Capital, told a session at the International Payments Summit this week that the history of technological revolutions showed that after around 50 years, new technologies move into a phase where they become mainstream, and the current changes are the latest phase in the microcomputer revolution that started in the 1970s.
Meyer said that there are “three possible futures” – the new players go on to dominate the industry in the way that Apple and Google have done; they create new ecosystems for themselves that displace existing models, as with Wonga, Zopa, AirBnB; or they partner with the dominant players, increasing revenue for all parties. The best example of this is Monetise, which Meyer was involved in funding.
Monetise is currently used by 350 financial institutions to provide mobile services to their customers.
It is a model that Meyer says will come to dominate: “The question is, to what extent are David and Goliath going to dance?” she says.
“I’m not talking about big companies buying small companies – I’m talking about new revenue streams and creating a digital P&L,” she said.
To thrive in this “app economy” firms have to answer two questions: “Who are my natural allies – in a networked world you can’t do this yourself – and how do I make it in their interest for me to be successful?”
