It’s amazing how much the financial industries have evolved. The way we transact business has never been smoother.
Financial companies are known for not being particularly innovative. But fintech startups have forced the industry to catch up. And partnerships between financial companies and fintech startups open even more opportunities.
Behind the scenes, insurance providers use technology that customers don’t see. They have traditionally been conservative in their technology choices. But now, insurance companies openly invest in advanced insurtech. As well as the startups behind it. And it’s becoming their way to compete and give a better service.
Looking back at 2019’s biggest fintech convention of the year.
…And it’s a wrap! The European leg of Money 20/20 in Amsterdam was a wild success. The world’s largest marketplace for fintech ideas and innovations grew in maturity. Fintech scaleups seemed to outnumber startups. A sign that the fintech industry is growing and developing.
As innovators come together to explore the future of fintech, we seized the opportunity to take notes! Let’s take a look at the week’s highlights.
Open banking in a cashless society
This year’s Money 20/20 theme was alchemy. Tracey Davies, president of Money 20/20, provided a platform for collaboration. And alchemy was the perfect metaphor for the conference. Industry leaders were seen networking and collaborating with SME founders. Conversations were sparked and ideas were heard.
“Cards and phones are taking over payments. Non-cash transactions are growing at the fastest pace ever. Lead by Asia that’s growing at 29%. Sweden is expected to become the world’s first cashless society by 2023.”
Peggy Alford, PayPal, Senior VP of Core Markets
Digital payments require coordination from different party. It’s no wonder that open banking is a hot topic. Nevertheless, it looks like things are taking more for banks than they initially thought.
“Open Banking was one of the main topics of Money2020 as the up-and-coming thing… this year again”
Jeroen De Bel, Founder at Fincog (at MeetupXL of Amsterdam Fintech Week)
The good news is, this means more maturity in the way financial institutions approach scaleups and startups. It’s no longer an afterthought or a sugar-coat, but rather a strategic decision.
“Banks need to rethink their strategy. Customers are evolving with fintech trends. And banks need to make room for more flexible touchpoints.”
David Brear, CEO of 11:FS
Too many fintechs, too little novelty?
Drew Graham, Director of Digital Strategy at Barclays, argued that there are too many fintech startups. His argument was that startups overpowered the quality of value they provide. Too many startups – too little new innovations.
From the point of view of a big financial institutions, the amount of fintech startups can be overwhelming. Banks have traditionally taken care of the whole value chain. Of all banking needs. Fintechs, on the other hand, often take care of more specific niches or products.
Another reason for this boom is the romanticization of startup culture. It’s “cool” to have a fintech startup, or to invest in fintech startups.
“A lot of capital being thrown around in small increments encourage the proliferation of startups.”
Dr. Leda Glyptis, CEO at Foundry and Chief of Staff at 11:FS
As Money 20/20 wraps up, speakers focused on the different industry trends.
“We have to make [banking] relevant. And we have to give people comfort. That governments and regulators can answer the questions they have. We need to reimagine a way of regulating. We need to become much more iterative, much more open.”
Martha Lane Fox on traditional financial institutions
Customers have gotten used to convenience. It’s gone from bonus to requirement. And we got to see how banks deal with this “new” requirement.
“It’s important to focus on solving the immediate needs of your customer, but always with the longer term vision in mind — at Ripple that’s the Internet of Value.”
Ginger Baker, Ripple, Sr. Director of Product
Adopting fintech solutions was definitely one of the most touted ways of achieving this. This is a double-edged sword. Financial institutions get a more flexible offering. But they also need to become flexible themselves. Otherwise, it will be difficult to compete in the industry.
Behind banking products: having a healthy fintech ecosystem
It’s important to have change among the changemakers.
Finance has been traditionally male-dominated. But the finance industry needs to reflect the society it serves. And women in fintech are rising to the challenge.
“So many women get denied leadership positions and speaking slots. Because the status quo doesn’t know that they’re there. So we need to work as an entire community to find that woman. And put her on stage.”
Elizabeth Lumley on gender diversity within the fintech industry
Another factor of a healthy startup ecosystem is healthy entrepreneurs. And startup culture has been known for being toxic in burning people out. Many entrepreneurs will find themselves stressed out of their wits. Sometimes it gets the best of you.
“You’re not out of control. You are totally in control of how you deal with this. So I opted to stay close to myself. And remain insatiably curious.”
Conny Dorrestijn, Founding Partner at Bankifi
Entrepreneur or not, make sure you know your purpose. Focus on the important tasks. Ask the right questions and keep looking for solutions.
Collaboration is breaking walls between organizations. The event was a platform for big leaders and new players to address common issues. And if we had to summarize the overall feel in one word, it would be “maturity”.
Every year, Money 20/20 grows and becomes more welcoming of innovations. Next year, we’re expecting to see more global trends getting adopted by fintech. As technology continues to disrupt, startups continue to improve their technologies. And one thing’s for sure. Money 20/20 will remain one of the largest platforms for cultural innovation and external collaboration.
What do you want to be able to share a year from now?
“Most big banks have the tools and advantages to push the boundaries of their existing business models. And they’re certainly motivated. What hampers their progress is uncertainty about how best to build on core strengths to create sustainable outcomes.”
Financial institutions know they need to change. They need to keep up with the digital growth. And they need to keep up with the evolving market that startups are disrupting. Their HR departments feel the urgency and know they need to drive the change. But what often remains blurry is what they need to do in reality to make things happen.
Yes, we need to steer this organization into the new direction – but what is the direction? What does the future of financial institutions look like in practise? And what does it require from people to actually get there?
The way we do transactions (of all sorts) is changing. Technologies such as blockchain and AI have affected the way we do our banking, insurance, legal work, administration, investments, etc.
But I’m preaching to the choir. Many of you who read this are already part of the next wave of fintech. Or they have the new killer insurtech solution. Or you’re using using blockchain to make some current operation obsolete.
At Nestholma we believe in proximity. Employees of financial institutions and entrepreneurs need to stay close to learn from each other. We need to be there as well, to make sure collaboration happens productively.
But… fintech startups are born global. Fintech startups are not bound by national borders. They need to look past the few big players in their country and build a network of international connection early on.
Tough combination, right?
It seems like we must be everywhere at once. And even worse: financial institutions are expected to keep up with everything that’s going on!
In order to be closer to the financial and fintech ecosystems in Southern Europe and Latin America, we’ve decided to open an office in Spain. Read more »
It is hard to think of a better time to be a bank, insurance company or other corporation who wants to work with startups. Over the past years, companies specializing in organizing hackathons, incubators, accelerators or any other kind of startup related programs and services have sprung up like mushrooms. And that’s why regardless if it is the first time an organization is embarking on the journey to work with startups or already have well-established systems and processes, they can easily find whatever help they need.
At the same time, there are so many players that finding the partner (or partners) for your organization and your specific goals is definitely not the easiest task. And that is why we created this guide to help you find the right partner for you.
We have run 26 different collaboration programs in the past. And in many of them, we helped financial institutions run a corporate accelerator. Because of that, I often the get asked if “we are an accelerator”. And no we’re not: we have expertise in that area, but we are far from that.
In fact, because of those moments, I’m starting to hate the word “accelerator” a little.
But there’s an even funnier part. I often realize that people are confused about what accelerators are. So let’s take a step back, and start there.
We tend to think of corporations and startups as being on opposite ends of the same continuum. That corporations are the more evolved form of startups, and they are what every startup hopes to eventually become.
We talk with a lot of interesting people every day (definitely one of the best perks of the job!). We learn every day from these smart people and their experiences and thought why not share all that with you. Cue our new monthly webinar series.
The first six episodes focus on collaboration and specifically piloting. In each episode we have two guests from startups and one from banks, insurance companies or other corporations, who talk about the different parts of the collaboration journey from the first contact to life after the pilot.
While we are waiting for the next episode (live on the 5th of September), I thought I would gather together some of the learnings from the series. I have to emphasize the word ’some’ as it is impossible to fit everything into one post, and I highly recommend checking out the series here for all of the learnings.