2023 Fintech and Financing Conference & Expo

To Support Disruptive Technologies, Take Bigness Seriously

Denise Hearn | Myth of Capitalism | May 24, 2019

future start - To Support Disruptive Technologies, Take Bigness SeriouslyShivaun Moeran and her husband Adam Raff founded one of the most promising startups you’ve never heard of.  Adam managed Europe’s supercomputers used for weather forecasting and Shivaun managed software products for General Motors. While having a cigarette outside his office one day in 2006, Adam was struck with a brilliant idea. What if you could create an online search platform to find the best price for any product? It would aggregate specific information about category verticals, and nothing like it existed at the time.

They quit their jobs, hired a team, and began beta testing. Their site, Foundem.com ranked well on Google and they were receiving a steady flow of traffic. However, a few days after the official site launch, visitors to the site disappeared and never came back.

Upon investigation, they discovered that Google had updated their search ranking algorithm and had demoted the site, so it appeared on page 4 or even 170 of search results. Foundem had effectively disappeared from the internet – blacklisted. They suspected that they had been intentionally knocked out of the market and, after speaking with other entrepreneurs who had similar experiences, filed a complaint with the European Commission. Nearly 13 years later, Google was fined 2.4 billion euros for crushing competitors and steering users to its own product search sites. This was the first of 3 big antitrust fines leveled at the company, the third coming this past March.

The story of these two entrepreneurs is representative of the challenges facing many new entrepreneurs today – they are up against concentrated and centralized power not seen since the first Gilded Age, making it very difficult to compete.

See:  Advancing Competition in a Changing Marketplace

Across many industries in the US and Canada, (and indeed globally), industries have become increasingly concentrated via waves of mergers and acquisitions. Many Canadians are aware of the main oligopolies of telco companies and banking. Banking is controlled by the Big 5 (TD Bank, RBC, Bank of Nova Scotia, Bank of Montreal, CIBC) which would have been the Big 3 had the Competition Bureau not blocked merger proposals in 1998. And The Wireless Telecom industry in Canada is heavily concentrated, with the big three capturing an estimated 88.7% of the market between Rogers, Bell, and Telus.

But fewer are aware of how industrial concentration has seeped into nearly all areas of the economy: eyeglasses, pharmacies, grocers, retail, and even funeral services. Park Lawn Corp, Canada’s largest publicly traded funeral service provider, went from owning 9 funeral facilities in 2013 to over 149 locations by the middle of 2018. Investment strategists praise the company’s consolidation efforts because death, though unsexy, is now becoming highly profitable for shareholders.

When companies merge, they announce the great savings from “synergies” that they will share with customers.  To give you a sense of how outlandish the estimates are, the accounting firm Deloitte calculated that the announced cost savings of the current mergers boom amounted to $1.9 trillion, which is more than the entirety of Canada’s GDP. Despite the purported ‘efficiency gains’ meant to come from merging, Canadians pay some of the highest rates globally for international travel, cell phone packages, and banking services.

Wall Street earned $21 billion in merger fees last year, so there is an incentive to keep this engine running.  And the US has its sights set on Canada: outbound deals into the U.S. increased by 40% from $80.56-billion in 2017 to $112.9-billion in 2018 (USD).

This matters for fintech firms for a variety of reasons. Most crucially, it should serve as a warning. The internet was invented to avoid single points of failure and protect from nuclear attack. Yet, in 2014, nearly 50% of all internet traffic moved through the Google and Facebook universe. Today, it is closer to 70%. What was meant to be the world’s decentralized, democratized exchange of information has become beholden to two choke point companies that extract the majority of revenue value from the internet.

See:  Technology is the ‘most profound force bearing down’ on big banks, ex-Barclays boss says

Denise Hearn ffcon19 - To Support Disruptive Technologies, Take Bigness SeriouslyBlockchain-backed cryptocurrencies were invented with a similar premise of decentralization and democratization. However, Bitmain, a Chinese bitcoin mining company, is estimated to have 70 to 80% market share in bitcoin miners, earning $2.8 billion in revenue in 2018. It is unclear, more than 10 years since inception, who has benefitted most from blockchain technology as it has yet failed to significantly deliver on its most lofty claims about equitable distribution.

This is why it is increasingly important to recognize the powerful forces with incentives to re-centralize power, and to set up appropriate checks and balances via regulation and citizen engagement to support the next wave of Canadian entrepreneurs – fintech or otherwise.

For regulators and government: Tax and transfer approaches treat symptoms, not the true disease of concentrated market power and capital ownership. We need to adopt economic policies that support distributed economies that more widely disseminate power. We also need to get serious about bigness. Antitrust and merger review need a return to the forefront of political discourse, as they increasingly are in the United States. Caring about innovation means taking concentrated power seriously and supporting disruptive industries like fintech, crowdfunding, and blockchain.

Funders should change success metrics away from chasing elusive unicorns with billion dollar valuations to fostering thousands of stronger locally grown and supported companies. Yes, we want national champions, but we also want a robust network of medium-sized businesses that are sustainable and adding value to the economy that do not get swallowed by foreign giants.

Lack of competition in markets hurts consumers, workers, innovators and entrepreneurs. It leads to a host of other symptomatic ills like income inequality and, by extension, populism. As the famous US Supreme Court Justice Louis Brandeis said,

“We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

See:

The time is now to admonish incumbent oligopolists and to support challenger entrepreneurs.

Disruptive technologies will play a key role, but it is incumbent upon regulators to foster markets where everyone has a chance to compete. We all have a responsibility to help create a more equitably distributed economic future.

 

Denise Hearn, Co-Author, Myth of Capitalism, mythofcapitalism.com

Denise Hearn 200 - To Support Disruptive Technologies, Take Bigness SeriouslyDenise writes, presents, and consults on economics, systems change, and human flourishing. She has presented to over 50,000 people at venues including:  The Oxford Union, Bloomberg, a Canadian Parliamentary Standing Committee, and group homes for foster children. Things she find fun: investigating complex social and economic problems and co-creating organizational growth strategies with entrepreneurs and founders. She has done this across diverse fields: impact investing, education, the sharing economy, and macroeconomics.


NCFA Jan 2018 resize - To Support Disruptive Technologies, Take Bigness Seriously The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - To Support Disruptive Technologies, Take Bigness SeriouslyFF Logo 400 v3 - To Support Disruptive Technologies, Take Bigness Seriouslycommunity social impact - To Support Disruptive Technologies, Take Bigness Seriously

Support NCFA by Following us on Twitter!







NCFA Sign up for our newsletter - To Support Disruptive Technologies, Take Bigness Seriously




Decrypt | Alys Key | Dec 1, 2022 The CFTC chief has proposed that the average crypto investor should get different protection from professional and high-net-worth individuals. In remarks prepared for a conference in Singapore, Commodity Futures Trading Commission (CFTC) commissioner Christy Goldsmith Romero said the current regime’s definition of a “retail investor” is too broad, covering everything from average households to millionaires and hedge funds. She added that she was not seeking to cut off the average investor’s access to the markets altogether but would seek public input on what kinds of extra protections should be afforded to these users. Initial ideas include easy-to-understand disclosures and limitations on leverage. See:  CSA releases 2022-2025 Business Plan focused on investor protection She was critical of the shift towards giving users direct access to the markets via trading apps, saying that a broker traditionally adds an extra layer of protection for the customer.  I caution against market structures that remove a broker’s duties to retail customers without a full assessment of what will be lost,” she said. Romero also called for her agency to invoke “heightened supervision” of crypto exchanges, adding she had been calling for such a move internally for months ...
Read More
Pixabay geralt investor protection - To Support Disruptive Technologies, Take Bigness Seriously
AUM Law | Nov 30, 2022 The Ontario Securities Commission (OSC) has released its most recent draft statement of priorities (SoP) in OSC Notice 11-797 – Request for Comments Regarding Statement of Priorities for Financial Year to End March 31, 2024. The draft SoP is open for comment until December 22, 2022, and describes the OSC’s key priority initiatives, broken down into one of the following four strategic goals for the year: Building Trust and Fairness in Ontario’s Capital Markets; A key priority under the first goal relates to advancing work on environmental, social, and governance (ESG) disclosures for reporting issuers. Strengthening Investor Safeguards; set out in the draft SoP is to strengthen investor safeguards. One key priority under this goal relates to the Ombudsman for Banking Services and Investments (OBSI). As indicated earlier this year by press release, the CSA is developing a proposal that will provide OBSI with binding decision making authority. See:  ISED Launches Competition Act Review: Consultation on the Future of Competition Policy in Canada Adapting Regulation to Align with Innovation and Evolving Markets; and The first key priority continues to refer to the crypto asset sector. Actions next year will involve continued application of regulatory ...
Read More
OSC statement of priorities feedback - To Support Disruptive Technologies, Take Bigness Seriously
Blakes | Karine Russell and Christopher DiMatteo | Nov 23, 2022 While a virtual-reality parallel universe is likely several years away, entirely new areas of law have developed to address the online world. Cyberattack or data breach class actions have become common. Privacy litigation:  If the metaverse develops as anticipated, it will involve the collection of an unprecedented amount of data about users. Platforms could (as they do now) collect data about what users buy in the metaverse, what they look at, and their conversations with other users. However, because a user’s access to the metaverse would be through a headset, much more data could be collected – for example, relating to user movements, physiological responses and perhaps even brainwaves – that will give platforms a deeper understanding of their users’ thought patterns and behaviours. Tort of intrusion upon seclusion where a defendant intentionally intrudes into the plaintiff’s private affairs in a manner that would be highly offensive to a reasonable person.  In addition to a data breach scenario, it is possible to envision other metaverse cases of intrusion upon seclusion. If it is possible to buy virtual real estate in the metaverse, for example, a defendant could be liable ...
Read More
Image Unsplash Javier Peñas virtual reality - To Support Disruptive Technologies, Take Bigness Seriously
Dec 6, 2022 The Portable Document Format, also known as PDF, is widely used. A PDF is an excellent format for distributing documents all over the world. The Portable Document Format (PDF) is extremely useful, allowing papers to be accessed from any device. Furthermore, it mixes written papers, images, and technological elements such as links, scales, graphs, and other critical components into a unified format. When there are photographs in a document, however, making changes becomes more time-consuming for the user, which is where TIFF comes in. TIFF, or Tag Image File Format, is an archaic bitmap image format. Aldus Corporation developed it as an unofficial standard for scanned documents in the 1980s. These photos are viewable and usable on all platforms. Many people are opting to convert PDF to TIFF for free online, and you can click to convert your files with a few simple steps. Technology has made things more uncomplicated than ever, and your files will experience the most satisfactory conversion procedure. Why Choose An Online Tool For Conversion? The quantity of file conversion applications available on the market nowadays is mind-boggling. Because of the increased interest, the availability of these instruments has been brought to light, ...
Read More
Laptop and device not art its science - To Support Disruptive Technologies, Take Bigness Seriously
US House Subcommittee on Covid | Release | Dec 1, 2022 Today, the Select Subcommittee on the Coronavirus Crisis, chaired by Rep. James E. Clyburn, released a staff report detailing the poor performance of many financial technology companies (fintechs) in administering the nation’s largest pandemic relief program, the Paycheck Protection Program (PPP)—may have themselves committed PPP fraud In May 2021, the Select Subcommittee initiated an investigation into the role of fintech companies Kabbage, Inc. and Bluevine and partner banks Cross River Bank and Celtic Bank in facilitating PPP fraud following public reports they were linked to disproportionate numbers of fraudulent loans. The investigation was expanded in November 2021 to include fintech start-ups Blueacorn PPP, LLC, and Womply, Inc., after an analysis determined significant percentages of PPP loans facilitated by the companies had indicators of fraud. The investigation was expanded in November 2021 to include fintech start-ups Blueacorn PPP, LLC, and Womply, Inc., after an analysis determined significant percentages of PPP loans facilitated by the companies had indicators of fraud. See:  Consumer Protection: Fintech Complaints Have Been Rising Chairman Clyburn released the following statement about today’s report: “As today’s report details, many fintechs, while promising to help disburse billions of Paycheck ...
Read More
Fintechs and covid payments fraud investigation - To Support Disruptive Technologies, Take Bigness Seriously
NCFA Canada | Mahi Sall | Dec 5, 2022 Thought Leadership Series of Expert interviews and insights related to a made-in-Canada open banking regime The National Crowdfunding & Fintech Association of Canada (NCFA), true to its mission of providing education, industry stewardship, networking, growth, and funding opportunities for innovative financial technologies and related sectors, is pleased to launch a brand new thought leadership series on Open Banking led by Berlin-based NCFA ambassador and independent expert in Fintech-Bank Partnerships Mahi Sall. NCFA is proudly contributing this thought leadership series to help shape a system that will bring profound changes in how financial services will be created, distributed, and consumed in Canada over decades to come.  Our hope is that Canada’s Open Banking system will improve economic outcomes, improve market efficiencies and competitiveness, and enable consumers to access new and innovative financial services in a way that is secure, efficient, and consumer-centric. The series is called ‘Canada’s Open Banking Journey’ and aims to aggregate international and domestic perspectives of Open Banking/Finance expert practitioners from around the globe to advance dialogues, key considerations, and explore potential solutions for the development of a made in Canada open banking regime with the following timeline: Sep ...
Read More
NCFA OB Series Steve Bom FDATA  - To Support Disruptive Technologies, Take Bigness Seriously
TechMonitor | Afiq Fitri and Greg Noone | Dec 5, 2022 CBDCs are on the march From China to the UAE, the Bahamas to Nigeria, countries around the world have started trialling the use of central bank digital currencies as a way to translate their national fiat currencies into a means of digital exchange. One of the drivers of these state-backed digital currencies is the dramatic decline of physical cash usage which, according to McKinsey, has plunged by approximately one-third in Europe between 2014 and 2021. As the popularity of physical money diminishes, central banks are eager to introduce CBDCs to reassert their roles as the anchors of capital. Reserve Bank of India (RBI) to officially begin piloting its own CBDC, the e-rupee, last week. The product of two years of research by the central bank, the RBI explained in a concept note published in October that the project would ‘bolster India’s digital economy, enhance financial inclusion, and make the monetary and payment systems more efficient.’ See:  According to CBDCTracker, these Central Banks have Launched a CBDC or Pilot Initiative as of Today X-Border Payments: European Central Bank Report says CBDCs Could Be ‘Holy Grail’ Adoption with CBDCs low in ...
Read More
CBDC adoption Africa and Caribbean - To Support Disruptive Technologies, Take Bigness Seriously
Leger | Dec 1, 2022 What do Canadians think about fintech in Canada? Do they trust online banks? How much do they know about fintech? And how likely are they to use different financial technologies in the future? We conducted a large-scale online survey to find out. Survey: A total of 1,544 Canadians were surveyed from November 3 to 6, 2022. The respondents were randomly selected from Leger’s LEO panel. Banks still dominate yet 2 in 5 would consider an online bank for their next financial product. Canadians who are likely to consider an online bank place the highest value on low account fees, the ability to manage everything online, and a user-friendly website/app. User profile: Those likely to consider an online bank are more likely to be under 55, male, employed, have an annual income of over $60,000, and have a university education. See:  Fintech Leaders Say Regulatory Challenges No. 1 Concern Digital banks will need to different offerings from traditional banks A strong majority trust traditional banks to adopt the newest technologies (82%), and also want their bank to adopt the newest technologies (80%). More education is required:  Many Canadians are aware but few are knowledgeable Among those ...
Read More
Leger survey whats important to Canadians for financial services - To Support Disruptive Technologies, Take Bigness Seriously
New York Times | Dec 1, 2022 Sam Bankman-Fried, co-founder of the cryptocurrency firm FTX, gave his first live interview since his company filed for bankruptcy. Andrew Ross-Sorkin of The New York Times asked Bankman-Fried to address allegations of fraud and mismanagement and whether the people and organizations who are owed money will get any of it back. Watch the full interview from the DealBook Summit event. The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org ...
Read More
SBF interviewed at NYT DealBook Summit - To Support Disruptive Technologies, Take Bigness Seriously
Guest Post | Dec 4, 2022 As time passes, the word leadership becomes more and more relevant as a competency in the global arena. This is why leadership in students is becoming more and more important every day, and we need to take care of developing this potential among students so that their path through the institution is meaningful, and equip them with the necessary tools to continue their studies at university. Of course, leadership is not achieved immediately, but college professors should encourage the development of this quality by reinforcing self-esteem as well as by using character-enhancing tools that can be applied both in and out of the classroom. The Importance of Leadership You don't have to wait until you start your professional studies to start stimulating your leadership skills. The best dissertation writing services claim that to have a good working future, you need to develop knowledge and skills that will help reduce the feeling of insecurity when implementing projects and achieving more ambitious goals. These days, personal development is not only through learning but also through some social competencies that will allow you to take strategic positions in the future. How to Develop Your Leadership Skills as ...
Read More
Importance of leadership - To Support Disruptive Technologies, Take Bigness Seriously

 

Leave a Reply

Your email address will not be published. Required fields are marked *

five × two =