The beautiful morning in the green Amsterdam was made even more inspiring and energetic with the advent of the 6th Fintechstage event, formed together and pushed to a great new level by Matteo Rizzi and Lazaro Campos, who carried the banner of well curated discussions by leading minds and tinkerers of the fintech world from the SWIFT’s Innotribe over to Fintechstage, that should now be the place to go on anyone’s fintech calendar.
Where fintech can be seen and understood broadly as it is pushed by various agents — be that tech companies trying to recarve the nature and the function of financial services to better suit the needs of today’s world, or banks trying to respond to the demand of their customers — the fabric is very diverse and merging various agendas can be achieved only through a well rehearsed storytelling. A Fintechstage experience is exactly that kind of show, gluing together through tension of this various joints of the fintech locomotion — views and acts of angels, VCs, startups, scientists and banking practitioners.
It was kicked-off by Don Ginsel who leads Holland Fintech, an Amsteram- based fintech association comprising over 200 companies and establishing the ground rules for startups to hear from key purveoyrs of tech, as Amsterdam is a natural hub for financial retail services, trade finance and commerce. It is at the moment active in building a local home to utilise the creative energy of tech engineers, where amid the blank walls and bare flooring the conference was held — and made perfect sense, as fintech is a world in the making and focuses more on meaning that the enclosure.
A Fintech: Bubble Boom or Bust speech from Howard Lindzon was pointing to different sides of the fintech companies market dymanics, and how the context of fintech innovation as well as the boundaries are themselves reshaping. One of the key trends for fintech in the US today is in marketplace lending and robo-advice, with all others being shaded away and diminished (an uber-funky proposition using all words to blow away the fans of fintech should have probably been by the ‘iPhone-app robo-advisor based on Warren investment philosophy to disrupt Golman Sachs curating stocks offers’).
The disintermediation of key investment processes — be that lending (disrupted by marketplace lending) or securities investment (crowdsale, secondary market and OTC) are generating new platforms and services lead to certain situations, where banks themselves become the leading investors in fintech companies, or in funds that push new forms of conduct. One example presented was the fall of Bank’s S&P index falling, where money could have potentially escaped from the doldrums of low yeild towards investment in new organisations.
B2B trading panel discussion elaborated on different startups experience of offering stocks, investment or financing opportunities through a digital marketplace. Since the connectivity factors and the adoption of online services efficiently solving a range of elements in the companies processes allow them to look for more on the web, marketplace finance has a long way to progress.
Where conservatives would argue that banks established a trust network protected by secure mechanisms, a rebuttal is based on both recent admissions of SWIFT on breach, forgery or misuse of this trust, sot the last-standing pillar of banks being the guardians of KYC element and Risk management does not look so formidable after all (‘why not have a facebook banking service through a end-to-end encrypted whatsapp?’ was one of the ideas).
Are you being robbed — a personal data travesty
The point of individuals and companies becoming part of the interconnected world of data, where offline movements can be easily digitised and added to the digital exhaust we generate (fitbit movements to trace infidelity in court), perverts operating drones flying above to recognise the faces of bikini clad models and harass them online — it becomes very hard to protect oneself from the privacy invasion, especially when the basic education on online privacy are missing.
These and other examples of personal data travesty was artfully told by Stuart Lacey, who is trying to create a platform to let people be in control of their data and decide whether and to whom they would like to sell it, proving a sizable difference if we just leave the data behind for peanuts. Companies have so much data out of us and we don’t care or don’t seem to care. It is literally a billion dollar business to sell cookies and other elements of the exhaust and crunch every part of one activity, and the least remaining element to validate the data is worthy for the services that exctract this data — is to stick users to the rule of real identities (make it ‘sellable’).
For that matter, Trunomi is working to allow users get discounts based on them sharing their data. Helping companies get into a ‘B2me’ entanglement — sharing only specified information, so that companies improve their numbers in a targeted way and would not sift through tones of data that is potentially infringing on personal wrights (as no contract can be legal to strip users off them). In today’s world, consent is becoming king — solving the problem of informed consent can drastically change the value we as users can get from monetising our data, as today we are being sold through convoluted and opaque consent by companies.
The roundtable on blockchain that followed invited several practitioners and banks as well as a special guest Mariano Belinky from Santander VC — to discuss the opportunities pursued by the industry in the blockchain race.
Why banks became interested in Bitcoin is because they saw in it the value transform protocol. Achieving KYC portability and removing the friction whle remaining in compliance with the reulation is something that can be solved through blockchain usage. Programmable money and using blockchain and Etherium (the mechanism for smart contracts that add primitive rule-based behavior to the ‘software computers’ these elements can be seen as).
One good point given was that all ideas still has to go through regulation consent as the processes has to be adopted as a level playing field. Irrespective of the economy of scale and the stability the network achieves with the many parties involved, they still face a roadblock of a very specific definition from a legal and bureucratic standpoint.
A different perspective on this was given at a panel discussion on Regtech, where representaves from Luxembourg and Ireland among others demonstrated market willingness to account for the fast moving pace of the market it has to regulate and to respond (how to account for HFT and MiFiD, machine learning routines working with risk models, or algorythm doing a KYC check), while also providing room for innovation and testing of new operating models.
One other speech that took my attention was one from Door Global founder, Lee Sankey, who participated in a number of interesting design innovation projects at Barclays and manifested the progress the banks are going through (originally for one project the number of people required to implement a small change in one branch (installing a bike) was 25, sometime later the team size mandated to create a new branch model was only 10. Despite the progress and deleveling of big banks org structures (hence their experiments with spinn off digital teams and investment in challenger banks), it is not enough, as,according to the example given, the team size of Mondo bank app was only 3 people when they incepted and launched it.
Ceding control and empowering teams is very important, but getting rid of the HiPPO effect is a long way to go – accorind to Lee Barclay’s Pingit project lasted 7 months instead of 2 years only because they had group COO sponsoring the project but also being commited to be present in daily stand-ups
Overall, FintechStage is a great platform for exchanging ideas and a well-curated one, manifesting a multi-faceted narrative for the fintech fabric. We enjoyed being part of it (more on what we presented at the conference a bit later)!