Finovate Europe: A snapshot of industry hot buttons

Finovate Europe: A snapshot of industry hot buttons

Four hot topics of note are a window into the coming wave of fintech breakthroughs.

March 26, 2018

The Finovate series of conferences—which now literally spans the globe with the new Africa and Middle East editions—remains among my favorite windows into the coming wave of financial technology breakthroughs.

For those unfamiliar with the event, Finovate originated the high-wire, seven-minute live demo format with no slideware or videos allowed. The handful of resulting technical glitches add an aura of suspense and assure the 1,000-strong audience that the process is legit.

Glitches aren’t necessarily fatal flaws, either, as the underlying concept often still shines through and even generates a bit of sympathy—as it did this month when Alexa went haywire on one hapless presenter.

This March, 13 American and Canadian firms ventured across the pond to showcase their wares while 20 British companies claimed home-pitch advantage at the London locale.

But 50 of the 68 presenters hailed from the European Union (EU)—since Brexit is not yet finalized I’m counting the Brits in that cohort—which certainly colored the thematic emphasis on display.

Greg Palmer, Finovate’s vice president of marketing and master of ceremonies told me that in curating an ideal batch of companies, his team also tries to present categories of solutions in rough proportion to submissions received.

Therefore, the roster’s composition doubles as a pulse of the hot topics in current day fintech.

Four hot topics I noted:

1. Open banking

Not surprisingly, given the focus on PSD2 (the EU’s Payment Services Directive) and the Open Banking Initiative in the EU and U.K., respectively, a plurality of solutions sought to capitalize on new rules affording nonbanks unprecedented access to transaction data and financial institution systems.

For those just getting familiar with the open banking model and its stateside implications, an article in the April Credit Union Magazine serves as a good primer. Salt Edge, NDGIT, and TESOBE’s Open Bank Project addressed this market most directly, but several omni-channel and account-opening solutions could be filed here as well.

Of these, my favorite was Best of Show recipient Meniga, which claims to significantly boost member engagement.

2. Authentication

If the focus of these innovators is any indicator, the iPhone X’s facial recognition is only the tip of the iceberg. These souped-up versions leveraged additional commands (“turn your head to the left”) designed to confirm a live subject is present, combined with “smart scanning” of official documents to solve the problem of closing loan agreements, meeting Know Your Customer requirements for new accounts, etc., without a branch visit.

iProov won Best of Show accolades playing in this arena, while HooYu takes an interesting P2P approach to the problem.

3. Blockchain/crypto comeback

Distributed ledger-based solutions have been scarce in the past few Finovate cycles. Perhaps the leading minds were holed up in the lab until they designed something compelling.

Several interesting ideas emerged here, including (a MasterCard-enabled path to spending cryptocurrency balances), SMART Valley (an attempt to crowd-source ratings of initial coin offerings), and Hydrogen (an API library also building a “public blockchain” and looking to offer “the building blocks of fintech life”).

4. Invest Tech/Insure Tech/SME Solutions

Indicative of the opportunities available across the financial services spectrum, a greater share of products extended beyond lending, payments, and core banking software—although there was no shortage of chatbot/artificial intelligence entries either.

Many of these solutions combined these notions, such as Wealth Wizards and aixigo (both bringing robo advice to investment management), Anorak (simplified life insurance front end), and Qover (“insurance as a service”).

Also thought provoking were SME (small and medium-sized enterprise) solutions for business insurance (ING Bank) and cash-flow management (Solna).

On the other hand, marketplace lending solutions were notably absent from the agenda, no doubt because of the challenges faced by some early movers in the space.

More on that to follow.

GLEN SARVADY is managing partner at 154 Advisors. Follow him on Twitter via @154Advisors.