July 5, 2017
Interviewed by: David Snow
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Technology’s Impact on Financial Services

The head of financial services investing for Pine Brook discusses the relatively light impact that technology has had on the sector thus far, and how private equity investors will back disruptive change in businesses such as mortgage finance.

The head of financial services investing for Pine Brook discusses the relatively light impact that technology has had on the sector thus far, and how private equity investors will back disruptive change in businesses such as mortgage finance.

Technology’s Impact on Financial Services

David Snow, Privcap:         

Many services that were once provided in the old fashioned way are now being provided via apps and other digital technologies. What long-term impact do you think that might have on the economy generally, and then on certain legacy players in the financial services space?

William Spiegel, Pine Brook:      

Technology’s had a much bigger impact in other parts of the economy, and if you think about the consumer trying to get a mortgage as an example, a mortgage is a complicated process. It’s a very long process. Companies are trying to make the experience quicker and faster, which will mean they can make it cheaper. If by straight through processing, the mortgage company can reduce the number of employees. They can reduce the number of errors. They may be able to offer you a mortgage less expensively to you. If you can offer a mortgage less expensively on what is most individuals’ most expensive outlay, then the consumer will end up with money in their pocket that they can spend. I see, actually, the price of financial services coming down, which is I think very good for consumers. It also means that the incumbents, the large incumbents in all of these industries, are going to have to react. They can react by buying companies that firms like Pine Brook create, because we start companies, or they can react by competing with us and having to junk their existing infrastructure and their existing ways of doing things.

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