What's the point of Fintech anymore? |TWIF UK & Europe

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As I sit here on Sunday, the 30th of August, at 12:37 Central European Time, with my Diet Coke in hand, thinking about what to write, this week’s ritual feels faintly odd. Fintech is one of my passions. I love to write about it. I love to work in it. I love to hear what people have to say, and I love, obviously, sharing my own views. It's always felt extremely important to me. But as I look at my X-Twitter feed, as I read on the BBC, as I watch the All-In/Dwarkesh/Moonshots Podcasts, etc., as I play video games, as I meet my friends in the pub (kids' playground), I have this growing combination of emotions that simply don’t make rational sense alongside each other: excitement, antipathy, and anxiety.

It’s like a great unheard rumble seems to be going on beneath my feet, like the way I still, even now, get excited about a storm, even with the knowledge there is some small chance of a disaster as a result.

That combination of excitement and anxiety is quite normal. But the antipathy is the new addition. How can one be both excited/anxious and antipathetic at the same time? I think it stems from the fact that I feel Fintech, once a category of its own, seems to be becoming a sub-domain of the all-encompassing AI. It’s almost as if what we do now will at best deliver incremental value, and even then, only if we aren’t washed away by the tide of AI. AI is here. No matter how focused or diligent or excited I try to be about what is going on in our industry (fintech, banking, financial services), I wonder whether anything we do will make a difference to what will happen in the future of this world.

Rewind a few years ago, or to be more precise, the day before Chat GPT launched, and we felt like we had something meaningful to contribute to society. If you were a founder's assistant at Revolut or the Chief Marketing Officer of Wise or the Commercial Strategist at JP Morgan or an MLRO at any random bank in the world, you felt that the job you were doing was shaping, in some way, small or large, the world. I felt fintech had a job to do to keep the baddies out, to make the goodies better, to create and protect value. It had to reduce cost, eliminate friction, and allow for bigger and bolder ambitions in our industry. We were building tools to improve humanity. But now I feel as if we are the tools, and we are now being wielded by a force we don’t fully understand. I wonder if this must be what shipwrights felt like at the dawn of the industrial revolution.

Before trains came along, the only way to move a meaningful volume of goods was by ship. The British Empire, in no small part, was able to proliferate due to having technologically superior ships. Rule Britannia could chokehold entire nations simply by parking a few frigates outside key natural harbors/ports across the globe. As they transitioned to iron and later steel hulls, they were effectively impermeable to foes of the time. If you were a shipwright in those times, you were SOMETHING. You got out of bed every morning knowing your work was changing the world. Whether on the British side or against it, the work you did moved borders as much as it did goods. Then came trains. Almost overnight, the military value of ports dropped precipitously. No longer could the Brits assert dominance on the periphery. Nations could move goods and people around their state/continent faster and cheaper by laying a few tracks. If you were a shipwright in those times, it must have felt a little like “what’s the point.” The shipwright's job didn’t end. It's still important today. But at its height, it was pure might.

I feel a little like this in fintech today. The rate at which financial services accelerated in the last 20 years was in no small part the result of gargantuan efforts in our arena. But where before we were all things to all people, brands, infrastructure, distirbution and more; we now seem destined to become a sort of infrastructural sediment. Underneath the surface crushed by the weight of AI, yet we will continue to exist as. We won’t disappear. But it's increasingly clear to me that the application layer is going to be absorbed by AI.

People don’t want infinitely long logins/passwords/authentication layers. They will flock to a single UI that can truly do everything. I think fintech is going to go through a submergence step. Much like the way cities and roads across the earth were ripped up during the worlds first great electrification, fintech (amongst much of the industry) is going to become invisible infrastructure that AI builds on top of. I liken it to those European cities where there is a citywide basement layer that once was the actual ground. Rather than sink over time, what actually happens is the surrounding earth rises over time, most of it through human intervention.

Whether demolishing and leveling, layer upon layer of road surfacing, street raising for sewer works, or just accumulation of human-made debris, the surfaces of many an old city today are meters higher than that of what the shipwright of the 1700s walked on.

And today again, the ground is rising faster than ever. Again man-made.

And in fintech, I can’t help but look out of my ground floor window and see that this man-made tide is also rising. And my view isn’t what it once was.


-Daniel

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