At Finovate Europe, I had the opportunity to be in ‘the eye of the current digital storm’, which gave me a chance to reflect on digital transformation in the industry today. To my surprise, I only met a few bankers and a handful of insurance people at the event. It was difficult to believe. I mean really, where are the folks from these institutions and why aren’t they at this leading event for financial services innovation? Yes I know that in the past enterprises involved in the financial services response to innovation has been: ‘let’s wait and see if it’s real, we have deep pockets and if it looks like it’s going to happen then we will take action’. But, in case you haven’t heard, those times are long since over. Digital disruptors don’t take their time. They act fast and will take your market by storm.
The banks and other industry players that were represented in the audience were those who already have a proven track record in innovation, and the successes to show for it. So, for everyone who wasn’t there, let’s take a look at what great ideas and new trends we all got a a sneak peek at in London:
1. Banking efficiency tools and platforms that support self-service capabilities are key.
Advice needs to be personal and relevant. Advicegames showed us that with their Virtual Guardian Angel concept, a personal and guided advice based on algorithm and behavioral research. Standard technology, like the camera of your smartphone, can be utilized to capture data, minimizing the customer’s time and effort to complete an application. Backbase showed us to this in an engaging and paperless loan application process which led to lower abandon rates. Another example was Kofax demonstrating how customers turn their smartphones into smart scanning devices and data extraction tools. Yes, self-service cuts costs but more importantly it enhances the customer experience.
2. Small Medium Enterprise (SME) banking is rediscovered.
We haven’t seen much innovation activity in the small business (SME) segment from banks in recent years. This year firms like Atsora showed us how a widget-based dashboard can optimize the relations ship between businesses and their banks, especially regarding how banks help businesses manage their cash flow position. Topicus Finan presented a self-service lending tool for businesses that creates added value in the busy live of entrepreneurs. Efigence showed the potential business impact of connecting transaction systems with accountancy systems and the company cash flow analysis.
3. Digital Money management (PFM) is moving from aggregation to insights.
We’ve already seen how Dutch banks like Rabobank are building PFM functionality into their online banking applications, and PFM has been a prominent subject at Finovate for several years, with players like IND, Figlo, and Meniga making steady progress in developing their solutions. However, there is now a clear shift from simply aggregating data from customer’s bank accounts (where there is still a lot to accomplish) towards creating relevant insights. Things like predicting upcoming expenses or income, and features such as “save vs. spend this month” are becoming standard. Now we’re starting to see how banks can help to turn dreams into reality with saving instruments like the ones shown by MyWishBoard. We also saw some nice new design styles presented from award-winning Tink. Similarly Etronika’s content rich applications were also great – it wouldn’t be a waste of time to take a look at what they’re doing.
4. Behavioral Biometric tools for authentication.
From an innovation standpoint I think Behaviosec was one of the best ID presentations. You should definitely check out this award-winning firm. They demonstrated a new way of securing online and mobile transactions though behavioral biometrics. It was very impressive but don’t drink too much or get nervous, because their biometric security system might keep you locked out of your iPad.
5. Bitcoin solutions surfaced.
Are Bitcoins the real thing? Their volatile behavior makes me think ‘the jury is still out’, but that wasn’t the case at Finovate. With a new currency new trading opportunities arise. Transparency in the exchange rate was the important message in the presentation from Switchless who presented a platform where bank customers can buy, sell, save, and spend Bitcoin
6. Commercial offers emerge to take the sting out of low interest rates.
If I asked bankers a few years ago what they thought about including commercial offers within statements as Cardlytics has presented in the past, they would have answered that it wasn’t part of their business model and could harm their reputation. Times have changed quite a bit since then. This year loyalty, cash back, and other commercial offerings, triggered by bank statements and done on online or mobile platforms, were demo-ed by firms like Red Zebra and Intuition Intelligence. The message was: delivering relevant offers to customers builds engagement. More importantly, it takes the sting out of the discussions you have with your customers regarding present low interest rates, something we learned last year at Finovate from M-bank.
7. Big data comes into play.
Big Data is the new black gold. It is a subject that will have a great impact on the entire financial services industry. Insights gained from transactional data from banks could help retailers to see where to open new locations, which is something Meniga showed via in their Marketwatch application. Transactional data obtained from PayPal was the basis of the ‘one click loan’ solution offered via the P2P lending platform ezbob. Kensho demonstrated how customers could cut through massive data sets in seconds to make sound investment decisions, simply by just asking questions out loud.
Now, here’s one we didn’t see enough of at Finovate:
8. The absence of insurance innovations.
Let’s not forget that Finovate is not only for banks and wealth management firms but also where we should be seeing innovation in the insurance sector. There is a lot going on in the insurance industry and the need to work on the digital transformation is becoming imperative to survival. But, aside from Backbase, participants mostly ignored insurance. However, with the rise of ‘internet of things’ and the fact that sensors are becoming very popular, it’s my guess that we are probably going to start seeing a lot of development regarding solutions in this area at future Finovates.
In closing, let me just say that Finovate is where everyone has the opportunity to witness ‘the eye of the digital storm’, and do a fair bit of trend spotting too. To me, many of the presentations showed a focus on creating beautiful, information-rich, graphical displays for customers rather than any really new, cutting-edge ways of truly engaging with them. Nevertheless, the venue, the format, and the networking discussions make Finovate a must see show for anyone who works as a financial professional, especially if you want to prepare your company for real digital transformation. So, if you weren’t in London, you better fasten your seat belts for the next one, or share your thoughts on digital financial innovation with me right now.