Fintech: Good and Bad News for Sustainable Finance

Abstract

Today, we need to explore deeper societal issues surrounding the rapid
deployment of computerized electronic platforms, cryptocurrencies and algorithms now
disrupting legacy financial firms and their models. Such electronic platforms and
technologies have been disrupting many sectors of industrial societies since the 1960s’
automation of manufacturing and more recently of publishing, retail, travel, legal and
medical services. One of the first financial disruptors was WitCapital, founded by
Andrew Klein, described in his book WallStreet.com (1998), which participated in 127
offerings, raised $9 billion and at its peak in 1999 was worth $2 billion. WitCapital was
bought by Sound View Technology Group in 2000, and Klein now helps non-profits in
his Amsterdam home. Recent applications now disrupting traditional finance are
systemic and global, see for example the FINTECH 100 and the rush to use Blockchainbased
ledgers both to protect incumbents’ markets and to disrupt them. All this is
described in depth, as well as with broad global analyses in Blockchain Revolution by
Don and Alex Tapscott (2016), the most comprehensive overview so far of blockchain’s
promise, future and policy implications. The core issue in finance is trust, on which all
markets rely, and these distributed ledgers offer many new ways of verifying
transactions, ownership, legal rights, identity and reputations so as to restore trust in
many systems. The new topologies and networks reshaping earlier human trust
relationships with protocols, principles, standards and gated sites are described by
Joshua Cooper Ramo in The Seventh Sense (2016). Research by Venture Scanner
tracked 1,379 fintech companies in March 2016 with combined funding of $33 billion.
The Chamber of Digital Commerce, founded by Perianne Boring is leading in
convening fintech companies and how standards and applications to regulations and
government functions are evolving (www.digitalchamber.org).