Finovate Europe 2014: Digital Financial Innovation
I’ve spent the past two days at Finovate Europe in London, which must be one of the more thought-provoking ways anyone in digital financial services can spend two days.
Here’s my perspective on the lessons from the event for digital financial services executives:
- More people are focusing on the small business opportunity. There were far more companies proposing to help small businesses manage their finances this year, in numerous ways from access to capital through to document storage and expense management. I was particularly impressed by the work that Efigence and Idea Bank have done to help Idea Bank’s small business customers manage their finances.
- Automated financial advice for mainstream customers is edging closer. For years, Forrester has talked to its clients about the huge opportunity, and pressing need, for financial firms to use software to automate the production of financial advice. A growing number of firms are trying to solve this problem from one angle or another, including Money On Toast, Vaamo, Your Wealth and Yseop. Perhaps the best quotation of the event came from Elizabeth Farabee at Yseop: “A banker doesn’t sell the customer the best product, but the product he knows best.” Automating the manufacture of advice can fix that.
- Customer-advisor collaboration is receiving more attention. As we wrote in our research on Next-Generation Digital Financial Services, financial firms not only need to become smarter about manufacturing financial advice, they need to improve how they deliver it. Firms like Atsora, Backbase, Kofax, The Moneyer and Your Wealth are all trying to make that process easier with technologies that support what Forrester calls Collaborative Advice. In small business, firms like eFigence, Idea Bank and Topicus Finan are addressing the same challenge.
- There’s a revolution coming in marketing, but I’m not sure everyone sees it yet. Future generations will look back in wonder at the idea that marketing was ever done without data about customers’ interests and intentions. Transactional data is a potential gold mine. Treasure it and make the most of it if you have it. Meniga showed some of the potential in banks’ data.
- There’s still plenty of opportunity to improve the sales process. The most immediate revenue-generating opportunity for digital financial teams probably lies in applying innovations to simplify the sales process for customers and increase conversion rates. Firms like Avoka, Backbase, Kofax and Yseop are all making smart use of technology to simplify the sales process for customers and boost sales.
- Mobile image capture is something we will soon take for granted. There’s a clear opportunity to use mobile image capture to prepopulate data and improve a wide variety of process, as demonstrated by companies like Backbase, Jumio, PhotoPay and Soon. Perhaps my favourite is the way Kofax uses a device’s camera to match a customer’s face to photographic identification.
- Social data is the next weapon in the fraud arms race. Several firms are using social data to verify that customers on digital touchpoints are who they say they are.
- Mobile image capture is not the solution to the cheque problem. Mobile payments are the solution to the cheque problem.
- Insurance remains notable by its absence. I continue to be surprised by the relatively small number of insurance companies that attend Finovate, and the few exhibitors focused on insurance. Many of the innovations apply to insurance just as much as banking and wealth management.
- It’s remarkable how well software can write. Firms like Yseop and Excess Return showed just how effectively software programs can now convert complex data into clear language. That’s great news for mass producing financial advice or investment recommendations. It’s a little disconcerting for people who make their living from writing (like me).
- Behavioural biometrics is brilliantly simple. BehavioSec uses distinguishing behaviour, like how hard or fast we type, to provide a kind of digital fingerprint and combines that with artificial intelligence to spot and prevent identity fraud. BehavioSec’s results are impressive.
- Bitcoin is in; NFC is out. Several firms brought Bitcoin-related innovations. NFC was mostly mentioned in the context of why something else was better.
- The attendees are as interesting as the exhibitors. It’s always interesting not only to talk to other attendees and see old friends, but also to see which firms are and aren’t there. Innovative firms like Barclays (and Barclaycard), BNP Paribas, La Caixa, Garanti and Rabobank were there in force. Other big firms sent no one at all. Perhaps it doesn’t matter — gathering ideas is the easy part; executing them is the hard bit — but I know which firms I would bet on.
- Putting a former model in skimpy clothes on stage will divide your audience along predictable lines.
- It’s odd that we still use business cards. Perhaps there’s something about the ceremony of exchanging them.
- ‘Marketing fairy’ is a great job title. Marketing should be about making dreams come true.
Congratulations to Backbase, BehavioSec, Dynamics, Etronika, IND / Misys, Luxoft, Tink, Toshl and Your Wealth for winning best of show.
Thank you again to Jim Bruene, Eric Mattson, Greg Palmer and the team at Finovate for putting on another great show.
Here’s my simplistic grouping of what the exhibitors presented. As always there’s a mix of direct-to-consumer brands and companies offering their technologies to established firms:
Treasury management: Temenos
Small business (SME) banking:
- Financial dashboard: Atsora, Efigence & Idea Bank, and ITSector.
- Working capital: ezbob
- Mobile point of sale: LifePay
- Document storage: Jack Henry & Luminous.
- Expense management: Cardwise (Xpenditure).
- App store: SaaS Markets
Bank credit management: CRIF, Nostrum Group and Topicus Finan.
Digital banking platforms: Backbase, Etronika, Fiserv, Fiserv, Five Degrees, IND (now part of Misys) and NF Innova.
Retail banking and payments:
- Comparison engine: KreditAja.com
- Offers: Intuition Intelligence, Meniga, RedZebra Analytics, and SmartEngine.
- Payments: Dynamics, fastacash, Mobino, MyOrder, PhotoPay, and Pixeliris (Copsonic).
- Money management: The Moneyer, SQLI, Tink, Toshl, and MyWishBoard.
- Sales process: Avoka, GMC Software Technology, and Kofax.
- Cheque deposit: Top Image Systems.
Investing and wealth management:
- Financial advice: Advice Games, Money On Toast, Vaamo, Your Wealth and Yseop.
- Wealth management dashboard: Luxoft (iStock Track)
- Investment selection tools: AnalytixInsight (Capital Cube), Excess Return, Kensho, and Nous.net.
- Start up investing: Kown
- Digital vault: SecureSafe
Security, authentication and fraud prevention:
- Biometrics: BehavioSec
- Payment fraud detection: Device Ident, Feedzai, Jumio and TrustEv.
- Authentication: Encap Security
- Mobile app security: Arxan Technologies
Innovation tools: Innovation Agency and Matchi.biz.