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Spotify was able to change and disrupt the whole music industry with its streaming platform. The big piracy problem within the music industry got reduced by the emergence of Spotify since more and more people were willing to pay for the music streaming service. Spotify was capable of connecting the listeners and producers within their platform. In return of a small fee, listeners received unlimited access to a large database of music and the producers got a compensation for providing their music on Spotify. The company has currently a value of more than $23 billion (BBC 2018).

Spotify counts 217 million monthly active users nowadays, whereby 44% of its users listen to Spotify on a daily basis. The average amount of hours spent listening to the app is 25 hours per month. In 2018, 10 years after Spotify was launched, the total time streamed on Spotify was 16,858,080 years (Spotify 2018). Based on this, you can conclude that the volume of the data that Spotify has gathered over time is enormous.

A few years ago, Spotify started using this data for creating personal playlist such as Your Daily Mix, Your Release Radar, and Your Discover Weekly. However, it is also expanding their personalization without you even noticing. At this moment, Spotify is experimenting with making popular human curated playlist like ‘Happy Hits’ or ‘RapCaviar’ partly human curated and partly personalized with algorithms. This experiment resulted in 80% more seeking out songs after listening to them in personalized playlists and 66% more songs were saved. By personalizing its playlist, Spotify can offer new artist the opportunities to promote their music by the right audience which will increase their streaming and popularity in new countries (Kastrenakes 2019). Personally, I am very happy with how well Spotify knows my music taste and is able to introduce me to new songs and playlists. However, at the same time it feels like Spotify knows you sometimes better than you know yourself.  I am very curious how far companies, such as Spotify and Netflix, will go with hyper personalization and when the limit will be reached.

 

Reference: 

BBC (2018) ‘How Spotify came to be worth billions’. Retrieved from: https://www.bbc.com/news/newsbeat-43240886

Kasternakes, J. (2019) ‘Spotify is personalizing more playlists to individual users’. Retrieved from: https://www.theverge.com/2019/3/26/18282549/spotify-personalized-playlists-curation-more-songs

Spotify (2018) ‘Celebrating a Decade of Discovery on Spotify’. Retrieved from: https://newsroom.spotify.com/2018-10-10/celebrating-a-decade-of-discovery-on-spotify/

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The presence of FinTech companies within the financial industry is sustainably increasing. These type of companies are able to provide a wider variety of products and services at a higher speed, which are more convenience and personalized for a better price. However, there are also risks that needs to be taken into consideration. For instance, since its still upcoming there are unclear regulations and people may make impulsive decisions (Central Bank of Ireland n.d.)

The influence of FinTech companies differs per country. The Netherlands counts more than 400 FinTech companies, which all strive to provide more personalized and accessible financial services, and thereby challenge the incumbents (Holland Fintech 2018). One of the best known Dutch FinTech companies is Ayden, which is a payment platform that enables global payments (Ayden n.d.). Ayden is the only Dutch company that is taken into account in the KPMGs FINTECH100 Leading Global FinTech Innovators and received the 17th place of most leading FinTech companies worldwide. When looking at other countries within this report, United States counts 18 of the biggest and most innovative FinTech companies, United Kingdom has 12 and China ends third with 11 companies. If you would look more specific to the top 5 most leading companies of this report, 3 of them are Chinese companies (KPMG 2018). The influence of FinTech companies is in these countries more noticeable than the Netherlands.

The most financial disruptive company and the number one of the report is Ant Financial, which is a spin-off of Alibaba and its paying service AliPay. Due to the large data sets that was collected from users, Ant Financial is able to use this data and their vast consumer base to create all sorts of platform based financial services (Concepcion 2019). The total value of the company is $150 million, and their paying platform, AliPay, counts more than 700 million active users (Detrixhe 2019)

The Dutch banks should watch out for emerging FinTech companies as well as hub firms entering the financial market. I am curious how the financial industry will look like in 5 to 10 years  in the Netherlands. Will ING, Rabobank and ABN AMRO still be the dominant players or did others take over their share?

 

References: 

Ayden (n.d.) ‘Ons Verhaal’. Retrieved from: https://www.adyen.com/nl_NL/over-adyen

Central Bank of Ireland (n.d.) ‘What is fintech and how is it changing financial products’. Retrieved from: https://centralbank.ie/consumer-hub/explainers/what-is-fintech-and-how-is-it-changing-financial-products

Concepcion, A. (2019) ‘How Ant Financial Became the Largest Fintech in the World’. Retrieved from: https://www.applicoinc.com/blog/ant-financial-services-platform-largest-fintech-in-world/

Detrixhe, J. (2019) ‘Ant Financial raised alsmost as much money as all US and European FinTech firms combined’. Retrieved from: https://qz.com/1537638/ant-financial-raised-almost-as-much-money-in-2018-as-all-fintechs-in-us-and-europe/

Holland Fintech (2018) ‘Dutch Fintech Infographic 4.0’. Retrieved from: https://hollandfintech.com/featured/dutch-fintech-infographic/

KPMG (2018) ‘2018 KPMG FinTech100 Leading Global Fintech Innovators’. Retrieved from: https://assets.kpmg/content/dam/kpmg/nl/pdf/2018/advisory/fintech-100-2018.pdf