January 10, 2006

If you liked EPIC 2014, the Googlezon film, and have dreams of perfect liquidity, you will love Sean Park’s AmazonBay 2015 — a future film on Financial Services disrupted by the net.

From his making of post:

My premise is as follows: the basic structure and ecosystem of the financial services industry has remained relatively unperturbed by the internet revolution…

My point is that while there have been very important and very real improvements in productivity in financial services due to this investment in ICT, the underlying business models have changed very little – if at all – and there has been no disruptive’ newcomers to the party. This is not completely surprising as the barriers to entry in financial services are very high: highly regulated, powerful (financially and politically) incumbents, extremely high customer inertia and a natural embedded conservatism given that we are dealing with people’s money. So if I am an eBay or an Amazon or Google or the next great WebCo, it is natural that I aim my innovation at softer targets like media or retailing (or even sports betting!) first. Main Street before Wall Street.

But while this entry barrier is very high, one day it too will be breached. It may be a few years away or more, but I believe it is ultimately inevitable.

Although speculative, Sean would know, he happens to run Digital Markets, and previously ran the Credit Business at Dresdner Kleinwort Wasserstein. One fascinating aspect of this scenario is the rise of sports betting as a dominant asset class.

Ross Mayfield is CEO and co-founder of Socialtext, an emerging provider of Enterprise Social Software that dramatically increases group productivity and develops a group memory.

He also writes Ross Mayfield’s Weblog which focuses on markets, technology and musings.