The Gods Of Fintech Are Harsh And Fickle
Games of buzzword bingo and comparisons of on-stage role-play to 1980s’ pornography acting…today’s comments on Twitter prove that it takes guts to face the sometimes cruel Finovate crowd. But if you want to measure the current beat of banking, wealth management, insurance, and startup hearts, there’s no better place than Finovate. Here are a few reflections on Finovate Europe 2016:
- Robo-advice is all the rage. Just when blockchain made it into a Dilbert cartoon, it disappeared from the Finovate stage. The only mention of cryptocurrencies was during Ledger’s presentation of its “hardware wallets for decentralised applications” (bitcoins, basically). This is not a bad thing; Forrester advice is to maintain a healthy level of scepticism. Finovate isn’t the place to prove blockchain’s purported capabilities. We’ve also moved away from personal finance management (fondly called PFM), mobile payments, digital wallets. If you want to be in vogue, you now need to pay attention to digitising investment strategies, biometric authentication and contextual engagement. Apart from the international-payments startup Valuto, this year’s Best of Show winners (Capitali.se, DriveWealth, SwipeStox, EyeVerify, IDscan) all fall under the first two themes.
- Let’s not discount user experience and relevance. Firms like Meniga, Personetics and Strands didn’t win not because their solutions weren’t good, but because audiences are looking to be wowed with something new rather than seeing incremental innovations. This doesn’t mean that what they’ve set out to do – engaging customers with personalised messages and offers – has been achieved. Doing so will require commitment and graft from banking executives. However, it doesn’t set their hearts racing. One way of achieving freshness is by transposing tested digital strategies from personal banking to corporate or private banking (as shown in the presentations of ING Bank Śląski/uselab and Backbase). Still, all these companies are steadily building a convincing story of what incumbents can do to with their rich customer data.
- Everyone is eager, but collaboration is tough. As I’ve written in my previous blog post, tales of successful collaboration between incumbents and startups have proliferated. As many startups hit prohibitive customer acquisition costs, they are eager to benefit from incumbents’ scale, capital, and customer base. White-labelling should be added to the Finovate buzzword bingo. Lendstar, meetinvest, SwipeStox all pitched their services for white-labelling. But as financial services companies seek to differentiate themselves by getting early and sometimes exclusive access to cutting-edge solutions, they will increasingly nurture their local innovation ecosystem. It was interesting to see so many Swiss startups this year, just as wealth management gained prominence at the event. No coincidence, I think.