Silicon valley power approximation, the Wall Street fight

note: hunting cloud under the mobile waves “silicon valley” entrepreneurial force gradually invaded to the heart of Wall Street, and aim at the traditional finance company paid by borrowing, and investment in areas such as short board, also deep concern that Wall Street, although has not yet reached the degree of “palace”, but has begun to fight back on product innovation, avoid irreparable.

here are wired magazine reported that the tencent technology translation:

in the shareholder’s annual email, jpmorgan chase CEO Jamie Dimon, (Jamie Dimon) unusually somber. In recent years, with the excellent talents and sufficient funds, hundreds of startups are challenging the traditional Banks. Dimon: “silicon valley is approaching.

in fact, Mr Dimon wasn’t the only notice of this trend. From P2P net lending to mobile payments, science and technology brings a new funds management way is fast. These startups that will change the old traditional Banks and brokers. Although many of these startups has not yet been proved, but this trend was enough to raise concerns on Wall Street.

these “financial technology start-ups” aimed at the traditional finance company paid by borrowing, and investment in areas such as short board. When the traditional company is the only market participants, they don’t have to worry about any problem. Even if the user dissatisfaction, they also have no other choice. Dimon, points out that Wall Street have been nervous, and aware of the need to follow the pace and a counterattack. Because of concerns that market share is threatened, Wall Street is catch-up. Innovation for startups, many Banks are introducing competitive products. In some cases, they are just trying to eliminate the threats to the current business.

bank counter

contradiction is simple: in the past, the bank can decide who can borrow money, what’s your interest rate. They control the transaction fee payment process, and the way of investment. However, in many start-up companies with large amounts of money into the market, this mode has been challenged. Use of big data, cloud computing and the Internet, startup provides a faster, cheaper option.

, for example, Lending Club and OnDeck Capital through the loan business has achieved great success, which makes them become a direct competitor of the bank. Square and Stripe focus on handling the user’s payment, whereas this is commercial Banks dominate the field. In addition, free mobile trading platforms Robinhood is working with eTrade, TDAmeritrade and Charles Schwab and other traditional brokerages competing for users. A report in March, Goldman sachs estimates that in the next five years, non-bank entities may take originally belong to the 7% profit of the bank.

in response, the traditional bank is launching its own corresponding products. In early march, Charles Schwab released a free automation portfolio advisory services, in response to the Betterment and Wealthfront startup algorithm developed similar automation investment. Dimon said the bank needs to “make efforts to ensure seamless and competitiveness of the service startup level”. Similar to the CharlesSchwab Experian, last week unveiled a new Credit tracking application, to better cope with the Credit Karma of Credit rating system. The latter more friendly to mobile terminal.

friends and enemies also

on the other hand, Banks are also cooperate with potential rivals. Dimon said in the email, the net credit class startup “is very good at and eliminate the” pain points “, in a few minutes to complete the bank may take several weeks to process the loan “. Finance company hopes that compete with emerging company is the fastest way to cooperate with these companies.

traditional banking is also investing in venture capital department financial industry science and technology. Announced last week, the P2P network startup loan Prosper completed a $165 million funding round, investors including several Banks, such as jpmorgan asset management companies, as well as SunTrustBanks. Prosper is not the only case. Many Banks such as HSBC and santander, has been formed within the vc fund, the financial technology start-up companies invested heavily.

the other some financial giants have set up the startup accelerator, hope to foster technology for the future. Barclays bank has been working with satellites, which will be held in New York this summer financial accelerator project of science and technology. Wells Fargo has launched a semi-annual accelerator program last year. The bank said, “the success of the company may be the bank’s supplier”.

in some cases, when Banks are difficult to cope with the impact of the startup, they will wave a directly to make acquisitions. Spanish banking group BBVA, bought for $117 million last year Simple online Banks, to develop digital business. Analysts believe that with the cake, entrepreneurial firms continue to get their hands on big Banks such acquisitions will be more and more.

after the Wall Street firms focus on this field, market competition will become more intense. The CEO of a financial technology startups, said if the bank cannot cope with the industry changes, so will be slow, but cannot be redeemed “failure”. At present, the threat is not only from trading, lending and payments startup, Google and apple and other technology giants are also focusing on financial technology. For the scale of billions of dollars in the financial services industry, science and technology company exploration has only just begun.