Fintech Finance reviews – Day One
Talking points of the conference
Everyone was talking about global fintech influencer Chris Skinner who appeared here, there and everywhere during Money’s first day. In his keynote speech he reminded us that without a huge leap towards agility and “if banks don’t shift their core systems in five to 10 years, they won’t be around.” Simple as. (Even if one wisecrack tweeter asked ‘Did Chris Skinner say that five to 10 years ago?”) While he was sharing the same panel as Chris, the CTO from Barclays, Michael Harte, contextualised the transformation saying that we face a tough change process, and we should expect to plan it for two years and another four years to execute. For Chris, (and plenty others like Ashok Vaswani, CEO, Barclays UK and Megan Caywood, chief platform officer from challenger bank Starling), banks need to become more open-minded to using the skills of specialist external providers. “Banks need to stop being control freaks and become curators and embellish partners,” he says. This will involve a fundamental change in mindset across the board. Commentator Brett King goes one step further saying: “If you want to be a leading bank, you have to be a technology company.” Joining in the chorus, former Barclays Group CEO and now executive chairman and founder, 10x Future Technologies, Antony Jenkins, said that “banking could face its own Kodak moment” and similarly strongly urges banks to embrace fintech solutions and to extend the family tree.
GDPR – if only very faintly, it was possible to see a slight queasiness in the face of the banking professionals by the time the letter ‘P’ was reached. For the fintechs, for whom this represents unprecedented opportunity, a whole different expression appeared… Ker-ching!
Everyone was talking about blockchain and crypto currency. Okay, not everyone. But the subject was omnipresent. For some, it was enough to hear the word to prompt a rather sharp exit from sessions, others stayed to learn more about this nebulous but fascinating inevitability while the rest saw opportunities to engage in jargon-filled jangle for the new generation of nerds. ‘Are we in a bubble?’ one panel member asked. ‘Yes’, said the expert, ‘we are in a bubble’.
What about the identity aspects of banking, asked others. ID is definitely the key according to Head of API Banking, Open Platform & R&D at Silicon Valley Banking, Dan Kimerling. He raised a debate that will run a while: should governments or banks become identity providers?
For startups, encouragement came from from one who should know, keynote speaker Jack Dorsey (Square) who reused one of the most succinct pieces of wisdom ever – and Nike thought so too – when he said “stop talking about the ‘what ifs’ and just do it!” He’d like to startups “getting out of PowerPoint” and going beyond the realisable. After co-founding Twitter where he’s still CEO, Jack is worth $1.9billion according to Forbes.
Aside from all the money talk, people were commenting on the music (live DJ don’t you know), the choice of sessions to attend (like), the food, the vibe (all likes) and of course our very own Payments Challenge where eight of the Finch Finance guys sought to travel to Copenhagen using eight different payment methods. Quite unbelievably, Bitcoin man lost out to gold guy – and no, that’s not another crypto currency – it’s old-school gold bullion. So yes, our industry continues to throw up good (troy) dollops of unpredictability.
If we’d been playing buzzword bingo for real yesterday we’d have had full house early on. In talking about all things banking (r)evolution, there can be no avoiding the lingo – some words have been around for a while and others are just beginning to take their place in the hall of buzzword fame. So what did we hear yesterday?
Well, I think we all now know that, on the ninth day, God created ‘blockchain’. Or, ‘the church of block’ as panellists lovingly called it at the Fintech Insider podcast, where, by the way, about 50% of the room put their hands up when they were asked ‘who owns crypto currency?’. (And did we discern an audible intake of breath by the other 50%?) It didn’t seem to matter where you were sitting in the very many well curated track sessions, nor who you were talking to at the exhibition stands, blockchain emerged time and time again. For those in know, it’s just a matter of time before blockchain and crypto currency gets its hairy feet firmly under the table. And for those who are in denial about it – or more likely, in denial about what the hell this ledger is and does, and how can we get excited about it – there will come a time in the not so distant future when they will willingly laugh as they recollect how they used to walk out of conference sessions at the mere mention of the word. Much as we did with the word ‘internet’ in the 1980s (if you were even around then), which was, of course, created on the eighth day a long, long time ago.
I know we mentioned it before but truly, I couldn’t move for everyone’s compulsion to use buzzword number two: General Data Protection Regulation – GDPR, the regulation that can’t be disliked because it’s handing consumers more control over their personal data. Even now when launch date is 25 May 2018 – I’d like to whisper that that’s 332 days away – it is clear that there are many departments in banks which are wobbly, let’s say, about what GDPR means for them and are relying on external service providers to guide and lead them, (see above). Repeatedly, I heard that the knowledge management inside banks hasn’t reached peak levels yet which means that money is being spent on acquiring that knowledge from elsewhere. Sure, it’s a whole new gig this, so of course there’s trepidation. Are we interpreting this right? Will our compliance be air-tight? What volumes of requests can we expect? And for those banks and financial organisations outside of the EU, they are still having to consider and plan how to work with them since the tentacles of GDPR will also reach them.
Quickly, two other favourites which need no introduction were ‘open banking’ and ‘API’ – that thing which will help (and is already helping challenger banks) to become more ‘agile’ (another favourite). And finally for today, we have ‘instant payment’ (hopefully obvious to all) and ‘regtech’ – the newest term to be coined for that expanding bunch of people who are supporting the banks through the big, big forest of regulatory definitions and how to best implement it and if possible, to avoid penalty fines.
Two incredible startup stories that broke on Monday were Rabobank’s announcement (officially due for release Tuesday), about launching Digital Trade Chain, a blockchain project which is due to go live this year – moving away from proof of concepts (POC) and into implementation. Hosted by IBM and powered by Hyperledger Fabric 1.0, Digital Trade Chain is IBM’s trade finance platform for SMEs and arose out of a memorandum of understanding (MoU) between seven major European banks – Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit – to collaborate on the development and commercialisation of the platform.
Then an inspiring success story came from Yoyo Wallet, an app that allows shoppers to make payments and earn loyalty rewards, announced it had raised £12 million, generating a total of UK investment to around £24 million. Launched in 2014 into a crowded mobile app marketplace which lets users purchase items on their smartphones. It also competes with Apple and Google, who have developed their own payment apps.
Less an announcement than an interesting keynote with MasterCard sponsored research about the sharing economy, which highlighted the scale of potential that the likes of Airbnb and Uber is already having, and will continue to have, on our world. The discussion acknowledged what is clearly possible as new ecosystems emerge out of sharing under-utilised assets that already exist. In particular, Airbnb’s Kapil Mokhat, director of payment programs and partnerships, noted a significant shift of demographics where it is no longer largely the millennial participating in Airbnb’s sharing economy because take-up now comes from all social strata. He was joined by Mastercard’s president UK & Ireland, Mark Barnett who announced their research on the sharing economy which found that 50% of respondent had heard of the ‘sharing economy’ while one in three had actually engaged in it (specifically Airbnb or Uber). Mark suggests that the potential to create new markets from our existing assets could “revolutionise” our economy in the next five to 10 years. Mark used his “two under-used cars” that sit in his driveway as an example of scoping economic potential – not sure what he’s driving nor what he’s planning but I’m sure there would be plenty visitors to London who’d like to hire them; we suspect they’re nothing less than high performance.
Written by Tori Hywel-Davies