The 2018 FINTECHMATTERS Summit in Vienna brought together incumbent banks, insurers, aspiring start-ups, FinTech associations and accelerators as well as a range of industry experts, united by a common area of interest: FinTech. Amongst a range of interesting sessions, I also had the opportunity to speak on a panel with UNIQUA, Commerzbank and F10 on what KAE sees as the big trends for the next 10 years in FinTech.
During the two-day event, we discussed a wide range of topics, inspired by recent trends shaping the European FinTech scene. Most discussions revolved around three topic areas:
- The current state of the European FinTech ecosystem
- The prospects of FinTech cooperation
- PSD2 & Open Banking – its impact to-date and potential to disrupt banking in Europe
Amongst a multitude of ideas, realisations and conclusions made at the event, three things stood out for me:
Collaboration is the way forward
Whether intended or not, collaboration was the magic word and the underlying theme of the summit. Whatever the topic of the presentations and panel discussions, despite divergences between FinTechs and incumbents, the two parties were clear on one thing: collaboration is the way forward on the road to innovation. This was also very well demonstrated in my panel discussion with two leading European financial services incumbents; whereas their approach to FinTechs might have been very different a few years ago, today they are both embracing the ongoing disruption and doing so primarily by partnering with prospective start-ups.
Cash remains relevant
Two FinTechs presenting their respective cash management solutions designed for merchants made me wonder: why does anyone care about cash in Europe anymore? Today, in the exciting world of card and mobile payments, how is any new solution built around cash still relevant? Then I went out to the real world and I realised cash very much still has its place. My attempts at using my card (let alone my smartphone) to pay for my morning coffee, taxi ride and dinner were all declined by a surprising response: “Entschuldigung, nur Bargeld” (i.e. “sorry, cash only”). Having lived in the bubble of innovation that is the city of London, it was difficult to comprehend that cash is still very much king (and increasingly so!) in one of Europe’s most capitals. Looking at recent payment statistics and prognoses, cash remains an integral part of society, not just in Eastern and Southern Europe but also leading economies in Western and Central Europe. Despite all the talk about cashless societies, perhaps we should concede that cash is here to stay for some time.
Can financial services be cool?
There is a general assumption that people do not enjoy taking care of their finances; it is seen as something that they simply have to struggle their way through. Surprisingly, the idea was echoed by incumbents present at the event too, conceding that they are mere utility providers. This was also underpinned by convincingly sounding statements made on our panel discussion: “finance is not a lifestyle product, it’s boring” claimed one incumbent; “no one wakes up in the morning wanting to get a credit card” followed up the other. They have a point: finance is simply not cool.
Then again, you look at what some of the FinTechs have already achieved in their short existence: shiny debit cards are being proudly flashed at the point of sale (e.g. Monzo, Revolut, Starling), crowdfunding targets are fulfilled within minutes by FinTech’s own customers (e.g. Monzo), while brand names are used as synonyms for banking products (e.g. Swish vs. peer-to-peer payments). Admittedly, at this stage these are exceptions rather than the rule, but the question arises: should incumbent providers part with their traditional ways of positioning their products and aim for being cool? Perhaps that’s one of the things that partnering with FinTechs that are cool can help them with.
All in all, following two days jam-packed with presentations, pitches, exhibitions, panel discussions and networking, the event confirmed that FinTech does indeed matter – to both start-ups and incumbents. We enjoyed this year’s summit very much and are already looking forward to next year’s programme.