Biggest disrupter to Financial Services in the next 10 years?
I was asked by one of the VCs this question a while back: Biggest disrupter to Financial Services in the next 10 years?
If we think about what will disrupt financial services in the next decade, it’s helpful to start by asking a more fundamental question: what’s wrong with the current system? The answer, I think, is that it's overly centralized, opaque, and slow. It’s the kind of thing you’d expect to see in a world where power and information are concentrated in a few large institutions, mostly working on a timeline that’s more suited to an old, slow-moving machine than to the speed of today’s world. But disruption comes when you find a way to break that monopoly, to create something that bypasses the middlemen and gives people access to things they didn’t have before. And in financial services, that’s exactly what’s coming.
So, what will be the biggest disrupter? I think it will be decentralized finance, or DeFi. The promise of DeFi is that it eliminates the need for intermediaries—banks, brokers, clearinghouses—by using smart contracts and blockchain to create trustless, automated systems. These systems, because they’re decentralized, can be more resilient, more transparent, and more efficient than what we have now. You could argue that DeFi is already starting to shake things up, but the real disruption is still ahead.
What’s really interesting about DeFi, though, is that it’s not just about replacing the old guard with something faster or cheaper. It’s about fundamentally rethinking the way financial services work. Take lending, for example. Right now, the system is pretty exclusive. You need a good credit score, a bank account, a steady income, etc. But with DeFi, anyone can participate in a global financial system. You don’t need to trust a bank; you trust the code. You don’t need to be a part of the traditional system to get access to loans, interest-bearing savings accounts, or even insurance. You can do all of it directly on your phone, without a middleman taking a cut.
The big challenge, of course, is that the technology isn’t quite ready yet for the mainstream. We’ve seen this before—things like Bitcoin and Ethereum started as experiments that only the most technical people understood, but as the underlying technology improved and became easier to use, the adoption rates went up. We’re still in the early phases of DeFi, but I think in the next 10 years, we’ll see massive breakthroughs that make it as accessible as online banking is today.
The biggest hurdle isn’t technical—it’s regulatory. Governments and traditional financial institutions have a lot to lose if DeFi catches on at scale. They control the levers of the economy, and they won’t give that up easily. But the beauty of decentralization is that it doesn’t require permission from the existing system. Once enough people start using it, and once the underlying tech proves itself to be secure, there’s not much the regulators can do to stop it. Sure, they can try to legislate, but the kind of decentralized finance we’re talking about is global. It’s harder to control something that doesn’t exist within any one jurisdiction.
There’s also a deeper philosophical shift happening in finance. The current system is built on trust—trust that banks will handle your money responsibly, trust that credit ratings agencies will give accurate assessments, trust that regulators are doing their jobs. But trust in institutions is at an all-time low. People are more skeptical of central authorities than ever, and DeFi offers an alternative: instead of trusting institutions, you can trust the code.
It’s also about the rise of the creator economy and "micro-transactions". As the world moves toward a gig-based, decentralized workforce, people will need more fluid ways to manage, store, and transfer value. Traditional banks are terrible at handling micropayments and cross-border transactions. If you’re a freelancer in Argentina working for a client in the U.S., the traditional banking system is slow, expensive, and rife with friction. DeFi fixes that, providing cheap, fast, borderless payments.
So, if I had to bet on the biggest disrupter to financial services in the next decade, it’s not going to be some new fintech startup that makes the user experience a little sleeker or a new form of digital currency that’s marginally more secure. The real disrupter will be when decentralized finance goes mainstream. It’ll be the moment when we realize that the future of finance doesn’t have to be controlled by a small set of institutions or governments. It’s when people realize they don’t need permission to access financial services; they can just do it, directly and on their own terms.
That’s the future. And when it comes, it’ll be more profound than anything we’ve seen before. What do you think?
