FinTech firms are working on a range of new technology and distribution methods that will require traditional financial institutions to change the way they operate and service customers. It has given birth to a new breed of financial services company. What we are seeing is disruptive innovation in motion. Coined by Clayton Christensen, disruptive innovation, describes “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”
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It is for this reason that London’s financial startup scene is booming and Venture Capital companies are paying attention. Take GoCardless for example, already backed by a number of other VCs, including Accel Partners, the start-up has pulled in $7 million (£4.22 million) for its online payment platform through a Series B funding round led by Balderton Capital.
With a growing number of London based mobile payment startups like slick direct debit provider GoCardless, and foreign currency specialists like The Currency Cloud, all are offering financial services at entry level cost and greater convenience through disruptive use of the latest technologies. Should the tradition large financial institutions start running scared? At the very least they should be paying close attention. I expect to see more traditional banks at this year’s Finnovate, a sign that things are slowly changing.
London’s success on the FinTech front can be best illustrated by Monetise. It is the first Fintech firm to have achieved Plc status and have gone on a acquisition spree since. Companies like Wonga & Zopa are well established lenders and could achieve similar success like Monetise. Their approach is entirely different from the old guard. Speaking to the BBC, Giles Andrews, CEO and co-founder of Zopa, puts it this way: “The business is not a bank and I’m not a banker,” he added. “We’re more of a data company.”
Here are my top 10 London FinTech Startups chosen for their disruptive innovation potential:
- The Currency Cloud:
- GoCardless
- Nutmeg
- Tradable
- FinGenius
- FundApps
- Crowdcube
- Duedil
- MoBank
- Zopa
In the video below, Clay Christensen, Harvard Business School professor and the world’s most influential management guru according to the Thinkers50, sets you straight out his landmark theory.
Image credit via claytonchristensen.com
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