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Remember the time you went to the university and not wearing shoes? I guess that question can be answered with a ‘never’. Shoes are not only inevitable in our daily fashion, but also correct our posture and provide us with the daily support needed.

 

In April Adidas launched a new sneaker together with Silicon Valley start-up Carbon with a 3D printed sole, which it plans on producing next year. The goal is to create small production runs for limited edition shoes. (Tepper 2017) However, it will not come as a surprise that this 3D printed shoe, that fits your feet perfectly will not be sold for a bargain. Not only is it very costly as this printer does not use the effects of economies of scale, but the printer itself is a huge investment. 3D printers range from $6,000 – $750,000, depending on the functionality, print materials and the size of the prints (Computer Aided Technology, 2017)

 

However, it is discussed that the prices will lower, due to new technological advancements and a high demand of both these printers and the products these printers create. Next to the fact you are wearing one of these cool 3D printed shoes, these shoes also have a great other benefit. People having issues with different sized feet, wide feet or thick feet will now also be able to buy boots or heals they would have never fit in before. (Burrus 2017) SOLS Systems is taking this benefit even a step further by using the printing device to make orthotic shoes that alleviate a patient’s foot pain and improve comfort. SOLS can become a great competitor of shoe labels such as Adidas, as they did extensive research on shoe buyers. SOLS found that 53% of the people are not wearing their true shoe size and 80% even experiences foot pain regularly. (Sols Systems 2017)

 

The future of 3D printing will result in cutting a lot of time in stores, but also in the factories (Burrus 2017), Normally it takes 12 to 18 months from the start of designing a sneaker, whereas, in a store this will only have to take a day before you can get your collectors item. (Tepper 2017) Even though the majority of shoes are made in the traditional way in my opinion 3D shoes will definitely become more common in the future. In a couple of years time you will be able to go to the university on your 3D self-created shoes, who would not want that?

 

 

Burrus, D. (2017). 3D Printed Shoes: A Step in the Right Direction. [online] WIRED. Available at: https://www.wired.com/insights/2014/09/3d-printed-shoes/ [Accessed 4 Oct. 2017].

SOLS Systems. (2017). Get Your Free Custom 3D Size Analysis | SIZERIGHT by SOLS. [online] Available at: http://www.sols.com/sizeright/ [Accessed 4 Oct. 2017].

Computer Aided Technology. (2017). 3D Printer Price – Stratasys 3D Printers. [online] Available at: https://www.cati.com/3d-printing/3d-printer-price/ [Accessed 17 Oct. 2017].

TechCrunch. Available at: https://techcrunch.com/2017/04/07/adidas-latest-3d-printed-shoe-puts-mass-production-within-sight/ [Accessed 4 Oct. 2017].

Tepper, F. (2017). Adidas’ latest 3D-printed shoe puts mass production within sight. [online]

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Hand to hand old school cash transactions are becoming obsolete as technology advances. Traditional banks and basic transactions are transforming from physical to digital channels. 2016 was the first year in The Netherlands where there were more debit card transactions than cash transaction. Just like the case of Britannica encyclopedia as depicted by Shapiro and Varian (1998), old school payments have transferred towards online alternatives. Digital platforms are now offer new forms of payments, decoupling financial services from the traditional financial services player (Newgen Software, 2017) Although the banking industry is only just undergoing its transition, the pace in which the industry is transforming is rapid. It is estimated that in five major retail banking businesses 40% of revenues and 60% of profits will be at risk by 2025, with consumer finance being the most vulnerable. (Currency Cloud Whitepapers, 2017)

Allowing the rapid pace of this transformation are millennial consumers who easily adapt to new payment forms, as they often see no difference between their banks and others. In a research conducted by Scratch it appears that 1 in 3 people are open to switching banks within the next 90-days, depicting how little people are attached to old-school banking (Newgen Software, 2017).

As described by Shapiro and Varian (1998), information is costly to produce, but cheap to reproduce. With recent IT advances the cost of distributing information goods has fallen tremendously. For online financial payments the main cost reduction, as opposed to traditional banks, has been the removal of the middle man and the back office where employees were often doing simple, repetitive tasks.

At the center of this transformation are FinTechs, financial technology companies. FinTechs are taking advantage of cloud computing, mobile communications, digital currency, and blockchain to bring new businesses to market. (Walton, 2017) These FinTech companies have differentiated themselves from large-scale banks by offering personalized niche services and data-driven solutions through maintaining an innovative culture and an agile organization. (Lee, 2016) Just as the Internet took over Britannica’s role, FinTechs are taking over traditional banking roles, offering faster and more personalized alternatives.

But why are FinTechs able to experience such success? One of the many models which can be used to depict the reasoning behind FinTechs’ success is Porters Five Forces.
To begin, the low switching cost for consumers leads to a higher bargaining power of buyers. Furthermore, the threat substitutes is high because the barriers to entry are relatively low, allowing for FinTech’s not only to grow, but also to compete in a fiercely competitive FinTech environment. Next, the supplier bargaining power is also relatively high as companies are facing fierce competition. Lastly, the threat of new entrants is rather low as the fixed costs associated with the initial investment are relatively high compares to the low reproduction costs. From a revenue perspective, the initial investment is extremely high compared to the reproduction costs.

So aside from being faster and more personalized, what are other advantages of this new information good?
Not only is the growth of Fintechs disrupting the banking sector, but it is also helping grow the e-commerce industry. Online fintech banking providers are helping drive e-commerce growth by simplifying the online payment process. (Currency Cloud Whitepapers, 2017)
FinTech solutions for payments are much cheaper than that of traditional banks. As previously mentioned, FinTechs remove the middle man and back office. Moreover, the fixed costs for FinTechs are the dominating sunk costs which are dedicated to the development and marketing of new payment systems, however the variable cost of producing an additional payment does not increase. Therefore, costs will remain minimum or even free for consumers.
FinTechs are several steps ahead of large-scale banks, which is resulting in that an increasing number of traditional banks are starting to invest in FinTechs to learn, collaborate and partner with them. Barclays, ABN-Amro, Rabobank have all created startup programs to incubate FinTech companies as a way to learn how they should adjust their business models. (Currency Cloud Whitepapers, 2017)

So how will the financial industry further be revolutionized in the coming years? The new currency across the industry is speed. So online payment systems need to be quick to set up, easy to use, real-time and fully mobile. Traditional bank branches will be immensely cut-down and bank employees will be retrained to be advisors.

FinTechs are the future of banking, but FinTechs are merely the tool, we as consumers are truly the ones who must help transform the industry. What do you think will be the next step for FinTechs? How do you see yourself managing your finances and financial payments in 2025?

References
Currency Cloud Whitepapers. (2017). Banks and the FinTech Challenge: How disruption has been a catalyst for collaboration and innovation. [online] Available at: https://www.currencycloud.com/files/2016-Banks.and.the.Fintech.Challenge.pdf [Accessed 27 Sep. 2017].
Lee, I. (2016). Fintech: Ecosystem and Business Models. Advanced Science and Technology Letters. [online] pp.Vol.142 (UNESST 2016), pp.57-62. Available at: http://onlinepresent.org/proceedings/vol142_2016/10.pdf [Accessed 27 Sep. 2017].
Newgen Software. (2017). Banking 2020 – Technology Disruption in Banking. [online] Available at: https://www.youtube.com/watch?v=i35xfEGAu-I [Accessed 27 Sep. 2017].
Shapiro, C., and Varian, H. 1998. Pricing Information. In Information Rules: A Strategic Guide to the Network Economy. Cambridge, MA: Harvard Business School Press.
Walton, D. (2017). Technology is disrupting the way people earn, save and spend. How should banks respond?. [online] World Economic Forum. Available at: https://www.weforum.org/agenda/2017/01/technology-is-disrupting-finance-how-should-leaders-respond/ [Accessed 27 Sep. 2017].