Is anywhere ever the capital of anything?

Adding this interesting tweet::

Was reading Term Sheet today and came across this. :

The Capital of Fintech: There’s apparently a fight, or battle, or race on between cities to become the Capital of FinTech. Hubs, scenes, ecosystems “capitals,” and various spins on the phrase Silicon Valley are overrated.

I see the benefit of mentorship, available capital, and attracting talent, but I don’t quite see the value in fighting over who has the most and biggest. Berlin’s economy minister launched a letter-writing campaign to beg London fintech companies to move. Singapore and Hong Kong are battling with government-sponsored conferences. Does there really need to be a winner? Can’t fintech just be an everywhere thing? (PS. I can’t help but think this is a sign that the fintech frenzy, and its related valuations, might hitting its peak.)

She is referring to this article ::

Several cities around the world are competing to become the capital, or at least one of the regional capitals, of fintech. If the young financial technology industry has the transformative effect that some have imagined, the contest could also determine the future capitals of finance as a whole.

And then of course for Asia the often coffee chat is around Singapore or Hong Kong:

Hong Kong has lots of competition from Singapore, which recently started its own aggressive effort to become a capital of fintech. Singapore has begun offering some of the same inducements as Hong Kong, including its first fintech week.

Last year, more fintech companies in Singapore raised money from venture capitalists than did in Hong Kong, but the Singapore companies raised less money in sum than those in Hong Kong, according to data from Accenture.

Funny enough all this is happening during FinTech week in Singapore. 🙂

My take is just like the blockchain frenzy we are at peak hype cycle for FinTech – in other words, Peak of Inflated Expectations. Buzzword bingo at its finest. I personally don’t think there will be a capital of FinTech but I could be wrong. 

This goes with my feeling that the only Silicon Valley will be …. Silicon Valley. Same as the next Amazon is still most likely Amazon.

As Erin alludes to – the power of a network, capital, mentors and the support system for a given vertical trend is great but products can be built by people anywhere for anywhere but maybe it helps to be in a Singapore or Hong Kong for some things but not always. Example is Abra based in California but product focused on the Philippines. 

In general though I think some of the core advances in FinTech are more practical and structural and may not need to be based anywhere special. In hearing Neal Cross from DBS the other day he mentioned that DBS has 40% profit margins so chasing the hype of FinTech is silly unless it can beat what they already do. Hint, hint – the banks don’t have a lot of interest in disrupting themselves so focusing on them or their financial centers may not be the answer.

I find it funny that the issues still plaguing banks and how fixing them is little to do with hardcore FinTech. Take for example that all the Singapore banks require you to use a hardware token generator. Mine ran out of battery the other day and I filled out paper forms to turn it in and to get a new one. New one had to be mailed to me and until I got it, I was not able to transact. Yes I know they have SMS tokens but they are for view only – not paying my bills.

Why can’t the bank know I don’t have my token for 5 days but allow me to do transactions that I always do? Pay the power bill for example but don’t let me add a new payee since that could be suspicious activity. Why can’t they use a software based token generator? Why can’t they use touchID on my phone? Why can’t they use my voice?

My point is that practical use cases for disruption in finance may not be connected to having to be in FinTech central.

Back to reality …

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