Why Disruption is Exactly What the Finance Sector Needs Right Now

For years, the finance world lagged in innovation. Now Tradesocio CEO Wael Salem takes a look at what's disrupting the industry.

“Companies want to meet the demands of their clients by responding faster to queries and by providing higher quality products. We have engineered fintech solutions that help brokers, investors and fund managers achieve their desired objectives."

For centuries, the world has experienced disruption after disruption. Engineering innovations replaced difficult manual labour and internet innovations replaced traditional print and communication. If you need to see a tangible example of disruption just think of Blockbuster video which was completely disrupted by the likes of Netflix and online subscription based viewing.

For years, the world of finance has lagged in innovation. The largest financial companies have forgotten innovation, only to react once new Silicon Valley startups come along. For example, the largest banks in the world ignored the shift towards cryptocurrencies. Recently, JP Morgan’s Jamie Dimon regretted calling it a fraud. Years ago, when PayPal introduced a new model for payments, large organizations ignored them. Years later, when PayPal was synonymous with mobile payments, large banks formed a new company called Zelle.

Similarly, when Silicon Valley entrepreneurs were creating free online brokerages like Robinhood, large brokerages like Charles Schwab ignored them. A few years later, they are playing catchup on the new business model. The same can be said about the world of robo-investing, which was introduced by startups like WealthFront and Betterment. Older companies like Vanguard had to launch competing products to catch up with the new millennial-focused startups.

The finance world is still in need of more disruption.

In fact, many consumers of financial products hate their banks and investment firms. Surprisingly, even companies like PayPal that disrupted the industry are not loved by customers, which opens a new opportunity to disrupt the industry.

Together with the dislike of financial products, the world is seeing an accelerated rate of growth. For example, Asian economies are expanding at a very fast rate, fueled by improved education systems, available technology, and the drive of young people to create change. All this presents an opportunity for financial companies and startups to innovate and reach new generations. For example, in a country like Kenya, a service called M-Pesa has helped three quarters of the population to be connected to the financial ecosystem. At the same time, micro-lending startups like Tala, have received millions of dollars from venture capitalists to disrupt the lending industry.

According to Wael Salem, the CEO: “Companies want to meet the demands of their clients by responding faster to queries and by providing higher quality products. We have engineered fintech solutions that help brokers, investors and fund managers achieve their desired objectives. They also help financial brands to easily adhere to the new MIFIID II regulations ensuring that they remain compliant.”

A combination of a growing economy, faster and more efficient technology and greater awareness about financial services provide an excellent opportunity for financial institutions.

In fact, statistics show that financial institutions who fail to innovate will be obsolete in the next few years. A large bank that ignores the concept of agency and mobile banking will not be able to compete. This is because its competitors will have better margins by running efficient branchless banks.

In the online brokerage industry, adoption of technology has made it easier for companies to focus on streamlining their products and services. For example, at TradeSocio, we have helped companies focus on their customers while we do the hard work. Our platform provides a unified solution that help power large global companies.

TradeSocio’s product suite is suitable for everyone in the financial market. Alpha Investor helps investors select the right funds to invest in, set up individual risk management and track their investments. Alpha Funds product allows money managers and traders to connect their trading accounts from any broker while Alpha Business Introducer allows introducers to invite investors and receive payments for client investments and trading. The Alpha Broker product gives brokers a platform to launch their private investment community.

Research shows that technology will continue to disrupt the financial industry. Companies that disrupted the industry will also be disrupted by new companies. Through disruption, the financial industry can become more vibrant attracting new audiences, making it easy for customers to transact and fall in love with the industry once again.

Tradesocio’s technology hub powers investors, fund managers and brokers. Unlike traditional investment platforms, Tradesocio makes investing accessible enabling users to invest, diversify their assets and dynamically manage their risk. discover more at www.tradesocio.com