Monday, January 06, 2014
Before I tell you why I think this, let me first say that I don't think we should feel badly about this. Mortgage bankers, like all bankers (with the possible exception of some investment bankers), are risk averse. We don't just jump into something because it's new and cool. Other folks aren't like us. We're working with a new client in the ad tech industry now and they're technology is so new and cool that the rest of the world hasn't even fully learned what it's called yet. This doesn't bother them a bit and they're going great guns.
That's the tech marketplace, I guess. They don't let the details slow down their innovation, and that's great. From our perspective, firms like Instagram (which we think will get even bigger this year) is really cool, but until someone figures out how to make a buck with it, what do you really have? Apparently, a lot, as many of the firms that have crowed the loudest about their mobile technologies are doing well despite the fact that the vast majority of brand marketers aren't really sure what to do with them. We don't do that kind of thing in U.S. financial services. If we don't know how we're going to make money, we generally stay out of the game until someone on Wall Street figures it out, which they invariably do.
Now, for why I think mobile will be big this year. I think this is the year that American consumers are going to find out that you don't need a bank to get a loan. They've been hearing about peer-to-peer lending for some time, but they haven't put much faith in it because they already asked Uncle Pete for a loan and he said no. Friends and family are not going to fund your next mortgage. To loan most of us money, it will take someone who doesn't know us that well. And guess what. They're out there, and they have money to lend, and a mobile app to do it with.
Check out this story on Small Business Trends, highlighting three examples of the mobile lending trend. The article focuses on small business loans, which are quite different then mortgage, but it starts here.
Banks may feel their safe from the kind of competition that comes out of Silicon Valley or the new tech firms. I expect that to change in 2014.
Not many bet the square would make such a dent in its industry. Have you noticed how fast square is growing these days? Disruptive financial technologies delivered via mobile device will become mainstream this year. Consumers are going to figure out that they can get money online this year and we're going to see some big changes. Both banks and consumers are likely to suffer in these early days (I'll save that for another post), but the time for being slow to get into the game is over.