Iv) Frenemies

Sometimes traditional players partnering with their potential disruptor, ie frenemies - this is a shift in attitude from disdain several years ago to a greater willingness to partnering with disrupters; some examples include

- Google introduced. Apple Pay (a mobile payment service) that uses existing bank and credit card system

 - American Express moved into Silicon Valley focusing on innovation in big data, cloud computing, social networks, online retailing and mobile payments

- Citigroup has a venture capital group that invests in companies that have the potential to disrupt and transform financial services like LoopPay , which has a technology that allows mobile devices to convey payment data to existing magnetic card readers
- Wells Fargo established a "start-up accelerator" to invest in firms that develop tools for the financial industry
- SunTrust Banks acquired the online lender Firstagain (2012) and renamed it as LightStream (2013); it offers unsecured personal loans of up to $100,000
- MUFG Union Bank uses Lending Club to offer unsecured loans to its mortgage customers
- MasterCard is linked with Behalf, which makes quick credit decisions by using limited information that includes crunching data from social media and online sources to determine the risks

. The catalyst for working with potential disrupters was the advent of Square (a mobile payment service started in 2010). More recently P2P are more threatening as they offer loans at rates below those of credit cards and banks, and offer investors returns above what they would get on bank deposits

At the same time, as new technology enters the real world, it can be potentially misunderstood by governments and their agencies. For example, when the car first appeared, it was banned from roads as it would disturb horses!!!!!

 

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