Thursday, 08 November 2018

We’ve just returned from Money 20/20 in Las Vegas, where fintech, payment and financial services companies meet every year to discuss the future of money – and what will drive change. After spending four days listening to speakers and chatting to exhibitors and clients, here are our five key takeaways from the event.


1. Open Banking is Gaining Attention in the US

Open Banking has been a dominant topic in the EU for some time. In the US, however, Open Banking has made less noise. Differences between European and US Open Banking standards are largely responsible. A key reason why Europe is ahead of the US in its investment in Open Banking are the regulatory requirements around PSD2. In the US, more companies are realizing that bank APIs are a significant commercial opportunity, which is driving growth in this area. As more US companies begin to realize that opening up banking services, as well as bank data, to the market is an exciting opportunity we should see the gap between the two regions narrow.

2. Disrupting Banking is Not About the License

A lively debate between US banking proponents and representatives from the rest of world took place on how and where to build the bank of the future. Spirited debates about customer experience, the regulatory environment and innovation ended with the consensus that innovation, data usage policies and customer experience are better in the rest of the world, but that the US hits closer to the mark on regulation.

The value of being able to secure a banking license was center to much of the debate. Megan Caywood, Chief Platform Officer at Starling Bank, argued that real banking innovation hasn’t taken place in the US because challenger banks are built on top of traditional financial institutions and don’t have their own charter. Dan Kimerling, Co-Founder and General Partner at Deciens Capital, countered that disrupting banking is not about the license; it’s about giving companies the ability to test products in market and iterate. In this context, he said that having to secure a banking charter is a hindrance. What do you think? Do financial technology pioneers have to have their own license for authentic disruption or can they innovate by accessing and leveraging legacy structures in new and different ways?

3. There’s Still Room for Growth in Personal Financial Management (PFM)

PFM, best represented by services such as Mint, which aggregate financial data from accounts at different institutions to give consumers a better idea of their financial profile, have been around for a while. However, that does not mean the concept is worn or tapped out. There appears to be a general consensus that no company has perfected PFM. Startups and incumbents are developing increasingly more niche PFM solutions to address specific pain points for narrower segments of the population. As banks open access to bank functionality and bank data, it will be interesting to see how PFM seizes this opportunity to better address specific challenges consumers face at various points in their financial lives.

4. Financial Services Still Need Humans

Last year, Artificial Intelligence powered chatbots for customer service were making waves on the expo floor, on panels and in passing conversation. While these are still a hot topic, companies providing financial services to consumers resoundingly agreed that interaction with another human is crucial for building trust, especially when consumers are facing sensitive or daunting financial decisions. The moral of the story: AI is cool, but humans are, alas, still human, and we build trusting relationships more easily with fellow sentient beings than we do with AI-powered bots.

5. More Progress Needed for Women in Fintech

Between the bustling Women in Fintech meeting and the enclosed breastfeeding station in the expo center, it’s clear an attempt is being made to create an environment more inviting to both men and women. Money 20/20 deserves applause for taking a step in the right direction. That said, at a closing session where executives shared their personal experiences of the financial services industry, Deepa Mahajan, an Associate Partner from McKinsey, presented data showing that “women remain significantly underrepresented and only account for 19% of executive positions in finance, which is slightly lower than the 22% average for women in the US overall”. The upshot: financial services companies are becoming more conscious of gender bias among their ranks, a crucial first step in addressing the issue, but they still have a ways to go.


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