Money2020 Europe has come and gone, and what a week it was. Europe’s fintech A-listers (and some guest appearances from further afield, east and west) gathered in Copenhagen in what has by now become a calendar fixture in the fintech world. The agenda was packed, the expo hall well curated, the atmosphere charged and buzzing, the speakers’ lounge was like the world’s most intelligent family reunion, and there was ice cream. The conference had it all. The organisers can heave a sigh of relief and pat themselves on the back for a job well done.
The rest of us, however, need to have a long, hard think, because although the organisers have done enough, I’m not sure the rest of us can say the same. In fact, though all the ingredients were there, we collectively failed to deliver in three major areas.
At the risk of dating myself, I’ve been in this circus way too long; since before it was a circus, since the time when we were quietly building software and selling it to banks; without cookie time and mentors, without as big a market and without as big a fuss. That time was less fun, but it was easier business (though truth be told, we didn’t think so at the time). Then about five or six years ago, fintech became a thing. Banks started talking humbly about intentions. It became OK to point out that the emperor was occasionally naked. It became OK to call out flaws and dead-end behaviours. It was a heady time of freedom and hope, and then … nothing.
The banks are still talking of intent. They’ve built some infrastructure, made some investments and done some thinking. They’ve done the easier (though by no means easy) parts and are struggling with the hard parts, which is OK; which was always going to be par for the course.
Meanwhile, startups have fought it out for investments and POCs, mostly failing to figure out how to transition from golden pet projects to viable businesses – doing the merry-go-round of accelerators and losing sight of how investors and customers differ, and becoming all consumed with one at the expense of the other.
And the pundits? Still taking cheap (though often justified) shots at the bankers; still talking as if we were in those early heady days, and as if nothing has happened since; as if the banks still represent one bloc and the rest of us safely sit on a separate and less contaminated part of the pond.
By all means criticise what has happened and criticise the absence of what hasn’t happened, but for the love of god let’s not speak as if we’re suffering from some kind of collective early onset of Alzheimer’s. This isn’t our first rodeo. Let’s make each instance part of a conversation.
The ‘space’ is five years old. It’s a toddler. It’s meant to be messy at this stage. Let’s see that mess. The banks have been participating, so let’s stop inviting them to the table as if they haven’t turned up yet. There’s enough to criticise in what’s happening, so let’s refresh the slides and move the debate forwards.
Bank bashing is easy and largely justified, but if after five years of you telling bankers that digital will change their business model, that there’s no ‘light’ way of doing this, that change comes with risk: they’re either listening and acting on what you said (albeit not inviting you to the party), or the message isn’t working. Either way, it’s time to move forward, and there’s plenty of scope to continue with the theme of calling a spade a spade. It’s just a new spade now. And maybe this new spade is as uncomfortable for the pundits as it is for the bankers. Maybe, just maybe, we can learn together.
The banks are here alright, but have mostly found the path of least resistance and are merrily tootling along. There are notable exceptions, of course, both among banks and within banks, but largely the name of the game is to neutralise disruption, to create constructs (labs, POCs, partnerships) that keep the new ideas well within sight (so you don’t get blindsided by progress), but at arm’s length (so the disruption doesn’t actually disrupt you) and figure out where the value resides. And that is as it should be. These are businesses and should behave like businesses, and they hold your granny’s pension and they shouldn’t be messing with that. It’s not their job to instigate disruption – that’s your job as a pundit and corporate agitator. Their job is to manage disruption and weather the storm. Since the narrative is stale and repetitive, banks are becoming complacent in these forums.
But that doesn’t mean that if you dealt with disruption once, you are done. Five years ago, discomfort was focused on emergent tech and the startup ecosystem. Now we’re comfortable around that and need to move to business models and value chain unravelling. If clients are less willing to pay for work you need to do less to achieve, what happens to your pricing structure, your investors and the thousands of people who draw a salary from you? That’s where discomfort lies today, and it’s vital we don’t ignore these topics. Yet, it’s only human that we should try to ignore them for a little while longer.
So from session to session, conference to conference, the same success stories are rolled out, the same cards-close-to-chest deliberations and vague statements until the press release is ready. Yet, fundamentally the agreement is tacit: see you next time to do the same thing. Not the next thing. Never the next thing. (Unless the regulator throws a curve ball like PSD2.)
Am I suggesting that the banks aren’t dealing with disruption? No. What I see is that banks are coming of age in this game, thinking about their value chain and not just playing at the edges. They’re looking to stay in business. What they’re not doing is talking about it. What they don’t do is send the guys who sit in those meetings to also attend the conference. They have a three-tier strategy: core business, business diversification and ecosystem engagement – a blend of PR and SCR. These forums should be in the second bucket, but they’re sliding into the third, and partly the discourse above is to blame. The big boys won’t turn up to hear the same stuff all over again, but they will send their juniors and a flashy stand. Also, there’s one more reason for this, impacting banks and startups looking to play in this space.
Getting down to business
Money is not a dirty word. Commercial conversations are kind of the point to all this, yet there’s a distinct absence of business getting done. The startups are not pitching. I had to remind every startup I chatted to first of the immense opportunity this concentrated demographic represents, and the fact that their investor pitch won’t cut it when talking to potential clients. It started as a joke, but by the end of the week it felt more like an epidemic.
If the startups aren’t pitching, it’s probably because the banks aren’t buying – not in the room, not generally. They’re window shopping, the early days of caution having solidified into an acceptance that deals won’t be made here. Why not, though? You have all your ingredients: the tech companies, the bankers, the influencers, who should all be walking the floors matchmaking, and influencing, and making the magic happen.
The Money2020 organisers put up a feast, yet many participants are going home hungry, and there’s no excuse for that.
READ NEXT: It’s time for fintech fight club
Image by TWStock, Shutterstock.com