Bridging the Divide Between Finance and Technology

Coronado is an island divided. On the one hand, it’s a historic seaside resort town – all spanish-style rooftops and turn-of-the-century Queen Anne-accented architectural flourishes. On the other hand, it’s a Naval base and the centerpiece of an eight-installation military presence spanning the coast of SoCal. Tourists frolic in the Pacific ocean as heavy-duty aircraft criss-cross in the sky above.

There is a harmony between these seemingly incongruous goings on. The fact that you are equally likely to see an enlisted man in fatigues crossing Orange Avenue or a gaggle of bike riders headed down to the beach is a big part of the place’s charm

This harmonious division serves as an apt metaphor for the annual Stocktoberfest conference thrown by full-time Coronado resident Howard Lindzon each year.

The event is a collision of the two worlds Howard inhabits – technology and trading. Startups and VCs share the stage with technical analysts and stock market aficionados. Financial data providers learn about how investors are using the information they produce and sell. Public market players and financial professionals get a first look at the innovations coming to augment and disrupt the landscape. Inventors get a feel for how their latest creations may be received upon launch.

It’s an amazing conference and probably the only one of its kind.

Having been a part of each Stocktoberfest since 2010, I’ve witnessed a tremendous evolution take place. What we’re seeing here in 2014 is absolutely seminal, I think it’s an aha! moment we’ll look back on for years to come.

Four years ago, the idea of bringing together tech and finance was an odd juxtaposition at best. The rap on finance has always been that it is stodgy, suspicious and resistant to technological innovation. Tradition played a big part in this – after all, we’re a 230-year-old industry centered around institutions that have been here almost since the beginning. The fear of regulatory hassle has been another consistent rationale for the slow pace of innovation.

But that’s all changed. While this was once a fairly bifurcated conference, where finance and tech panels alternated one after the other, a new cohesion is now apparent. Finance and technology have converged to the point where just about every presentation at Stocktoberfest encompasses some element of both.

This year we heard from dozens of startups, at varying degrees in their development, all tackling financial services from different angles. The interesting thing today is how readily these companies and their products are being embraced by brokerages, fund companies and advisors. Hesitation is no longer the watchword, cooperation seems to be the new zeitgeist. It’s as though there was a breakthrough sometime during the past year and, overnight, all resistance has melted away. Finance people seem to want to dive in headfirst and the enthusiasm is utterly infectious.

Perhaps it’s a capitulation of sorts; banking and brokerage personnel accepting the inevitability of disruption and choosing to embrace it, come what may. Perhaps it’s a jockeying for position in the new world order – These things are going to happen with us or without us, we may as well stake out our new territory rather than fight for what we used to control. Whatever is driving this attitude adjustment, it’s a fascinating development – What happens when the disruptees begin cheering on and funding the disruptors?

It’s been remarked that this is the best time to be an investor in history. Trading costs have dwindled to nothing while powerful new portfolio tools have proliferated across the web. The amount of choice between products and providers has exploded, while transparency and ease of use have become the starting point for new entrants, not an afterthought. Stocktoberfest and its attendees have played a huge role in these developments. Based on my conversations with everyone I’ve met this week and all of the things I’ve seen, I believe the best is still yet to come as we continue to bridge the divide.