FinovateSpring 2017: panel discussion (the conference’s first ever!)

FinovateSpring 2017 in San Jose, US, concluded with its first ever panel discussion! “Our panelists will recap the key demos and help put the innovations on display into a broader context,” the conference organisers said.

Kirsty Cooke, head of marketing at Mapa Research (Banking Technology’s sister company), reports.

The panel was moderated by Ranjit Palkar, partner at Capco, and the panelists were:

• Lawrence Tang, head of investment promotion, InvestHK
• Oded Shoshany, CEO of Celeriti FinTech
• Valentina Isakina, MD of JobsOhio
• Illya Shell, VP, new product development and innovation, Mastercard
• Marc Chaifoux, VP of fintech intelligence and innovation, TD Bank

FinovateSpring 2017 panel

Palkar: What is the most interesting stuff you’ve seen over the last two days?

Chaifoux: Bank-ready and bank-friendly companies. AI embedded in solutions (this is now table stakes.) We [TD Bank] are very interested in this. Saw a lot of non-tactile interfaces, VR and voice – the next big frontier.

Tang: Wealth management robo advisors. There is lots of money earning no return at the moment, so we need more of that! We want to see more of the blockchain.

Isakina: Maturity in financial technology but also nascent opportunities. Very interesting.

Shell: A lot in the mortgage tech space. Big data and analytics – good to see that represented. Mastercard’s primary asset is data. More insights mean being able to provide better tools and solutions [to customers].

Shoshany: Real-time information and transactions. Fed back into experience. I think this is the future of banking. A fully integrated way.

Palkar: Anything you expected to see but didn’t?

Shoshany: Thought we’d see more on big data. Ability to look at huge sets of data and working out how it is relevant – something we will see more.

Shell: Use of social – only Alpha Rank and Neener showed us what’s possible with social data. Didn’t see much blockchain. Maybe a technical solution in search of a problem? A lot of hype and some testing going on but nothing really launched to any scale.

Isakina: What was missing was around customer problems. Is it addressing some of the larger needs of people, never mind banks! How can it make their lives better? WEF study said 18 months ago that fintech could transform individuals’ lives; impact everyone in better way. Think of the bigger higher level opportunities.

Tang: Online lending with social media analytics. In Hong Kong, WeLab raised lots of money and they use social media analytics to create a credit score. You get a 15 second loan approval.

Chaifoux: A lot of companies talking about online/mobile engagement. What about improving the person-to-person or in-branch experience? SaleMove and CallVu were cool to see – enriching the telephony experience with digital technology.

Palkar: What should fintechs be doing in terms of those bigger problems then?

Isakina: The [fintech] movement is capable of more than just marginal impact to a bank’s financial statement. How can we transform as a society? These are big words that don’t seem real. Think of the pyramid of humanity – we [here at Finovate] are at the tip. The rest of world have incredibly difficult problems. I am asking start-ups to think about how they can solve those problems. Start with a mission. What legacy can I leave behind? Think about the continuum of society – your life will be over in the blink of an eye. Leave the world better off. If you are mission-driven and passionate, success will follow.

Shell: Same – Mastercard is not just about banks but about people. In our commercial products team, we see that around the world there are less established infrastructures (or “rails”) and [people] have trouble accessing credit and we focus on how to help them with the right tools and support. For very small companies it all revolves around cashflow; hard [to lend to these companies] when there isn’t enough data; who will take the risk? How are you helping the underserved? There is even a long tail (and opportunity) in established markets like the US and UK.

Tang: McKinsey said half of SMEs and individuals are unserved or underserved in banking. There is a $2 trillion credit gap. [We need] innovative ways of providing lending. Also remittance – in the developing world, many people work outside their home countries, sending money back. Surely this can be done with much smaller charges. Lots of demand for this if you can provide a low-fee remittance service.

Palkar: What are each of you doing to help fintechs?

Shell: Mastercard has an open view; we have a long history of bringing them into the fold. There are 23,000 banks around the world we consider partners, and we fold in solutions [from fintechs] as well as our own. We have an incubator investment and support and access to resources. We will never design, develop and deliver everything ourselves. You’ve got to start with the problem… start-ups help solve it… but it we make sure it feels like a single solution in terms of end user.

Chaifoux: On one hand you have banks who find it hard to build products cheaply and rapidly in the right timescale – but they do have trust. Then on the other hand you have start-ups who can build quickly and iterate and their challenge is customer acquisition – it seems obvious that the path forward is greater collaboration. We are interested in a partnership-based approach. Banks are not the easiest to work with – we can’t wave a magic wand over our legacy systems. Take us as we are!

Tang: In Hong Kong, the government (central bank) set up a fintech office and a sandbox for FIs and a local institute for fintech research – it’s about ecoysytem building. In the private sector: funds are ready. There is one accelerator that includes the ten largest banks – so fintechs joining it can access the ten biggest banks in the world. China is a big market but hard to crack. Alibaba has a venture fund for those working in Hong Kong. Then access for ecommerce and payment. The market: don’t go for easy money, look at where it will be in the future. A flexible business model is required.

Isakina: What are start-ups looking for? Access to customers e.g. banks (partners) and capital. So how can we help? Ohio is a successful state and three large cities. We offer a cohesive package. There is currently fragmented innovation. Ohio is in the top five for fortune 500 company locations. Fintech 71 (the highway that connects north and south) is the Ohio accelerator. It’s a shared, not-for-profit asset all about partnering and co-discovery.

Shoshany: To be successful you need ecosystems. What made Amazon successful? Marketplace ecosystem. See also Salesforce.com and the app store. We can be a core component and invite others in and make it easier to go to market. There’s a co-banking hackathon here in July – over a weekend, a basic integration can be established best goes to market. More strategic, not just core – we provide a platform to accelerate it.

RP: Social media and brand management. Why should I bother with it?

Chaifoux: It’s essential. Big companies not doing it well are being heavily impacted. It’s a strong tool for engagement with our customers. It’s good for the brand – to show how we are growing and evolving and becoming more responsive to customer needs.

Tang: It’s essential. The most effective ways to reach people.

Shoshany: Social media is the new way to communicate. All of us need to be where cusotmers are. Whether B2C or B2B on social media. Figure out how to leverage it. It can be so damaging if not managed properly (e.g. United Airlines). If not done at all, you may as well not exist…

The full article is available on the Mapa Research website. Click here to continue reading it. Lots more great views and soundbites!