Fintech doesn’t matter

Excellent commentary from Dave Birch making the point that innovation in financial services is not going to bedriven by fintech (digitizing what they do now) but regtech (changing the rules of the game).

I hypothesise, that Moore’s Law and Metcalfe’s Law are overcome by the actual law and the costs of KYC, AML, CTF, PEP, Basle II, MiFID, Durbin and so and forth climb far faster than costs of transistors fall. This observation in fact shows us the way forward. As technology has driven down the costs of computing and communications, the costs of shifting bits around has collapsed. But financial services is – as it should be – heavily regulated and the costs of that regulation have rocketed. The net result is that fintech has not brought about a revolution.