The streaming music industry remains a lucrative, if volatile, field for companies, and the latest news from Spotify further confirms this. Financial filings from Spotify Thursday show the company had growth in both paid users and losses last year. For the previous year, Spotify reported growth in its total user base of 38 percent to 126 million users. The company also announced Thursday it had reached more than 140 million monthly active users. Among its Spotify Premium subscription tier, the streaming music service saw a similar jump of 71 percent to a total base of 48 million users.
The financial services industry is undergoing a massive transformation. Financial technology companies, fintechs, are challenging traditional enterprises and players from other sectors such as retail and technology are entering their turf. Data is at the center of this transformation. Like all sectors, the power of data in financial services helps institutions across the industry – from retail banks to mortgage brokers – offer products, services and experiences that exceed customer expectations. A recent McKinsey study showed that data flows now exert a larger impact on a countries GDP growth than the centuries-old trade in goods.
Throughout history, banking has remained a closed industry, monopolizing the majority of other financial services. Total digitalization has brought changes to the industry. Fintech firms give users the right to choose an alternative. However, the PSD2 directive adopted in the European Union goes even further. It will disrupt the entire banking industry, completely changing the rules of the game worldwide through massive competition.
For a long time, new market entrants found it difficult to break into the financial services industry. FinTech disruptors have been finding a way in. Disruptors are fast-moving companies, often start-ups, focused on a particular innovative technology or process in everything from mobile payments to insurance. And, they have been attacking some of the most profitable elements of the financial services value chain. This has been particularly damaging to the incumbents who have historically subsidized important but less profitable service offerings.