Tag: fintech

Innotribe at Sibos 2015 – “The right mix”

For its seventh year, Innotribe at Sibos goes center stage! This translates into two components: first, some our most successful sessions of previous years go to the main stage: the Future of Money session and the Innotribe Startup Challenge Finale. Second, we are building an awesome innovation hub on the exhibition floor, next to the SWIFT stand.

On the outside, the stand is designed as a vibrant networking area, with exhibition demo stations for the Innotribe Startup Alumni and the late stage semi-finalists of the 2015 Innotribe Startup Challenge. And we’ll have the best coffee corner in town with real baristas.

Inside, the stand will host our circular workshop room. It’s already nicknamed as “The Blender” and has a magical 360° projection wall. This is where the majority of our sessions will take place.

As always, we will introduce the latest innovation trends, whilst delivering thought-provoking content designed to challenge perceptions. Together with global professionals from across the field of innovation, Innotribe will explore topics at the center of the financial services industry agenda in payments, market infrastructures, and the corporate landscape.

In a play of words on Kevin Kelly’s book “What Technology Wants”, we have four major themes this year, one theme per day:

  • Day-1: What Platforms Want
  • Day-2: What Society Wants
  • Day-3: What Innovation Wants
  • Day-4: What Machine Intelligence Wants

Across the four days, we have two big design principles: Millennials and Power Women in Finance who will be an integral part of all sessions in this year’s programme. We just launched two whitepapers to prepare us for Innotribe Sibos:

As you may notice, we put a lot of efforts in ensuring diversity by having different thought leaders joining us in every session: men, women, millennials, investors, accelerators and contrarians. Whirling around the room with the different protagonists like in a real blender, we will create the right mix of topics and speakers and create an interactive environment for our audience. This year we also do special effort to integrate art and music in the overall design of all our sessions.

Next to this, the Finale of this year’s Innotribe Startup Challenge will see the 12 early-stage startups selected during the regional showcases pitching their pioneering products and services.

Innotribe is open to all Sibos delegates willing to drive change and embrace innovation for the benefit of the financial industry, by understanding its trends, opportunities, and challenges: business analysts, product managers, strategists, marketing/branding/innovation managers, transaction bankers, securities managers, corporates, standards experts, payment professionals, investment managers, regulators, policy makers.

Registration via Sibos.com: https://www.sibos.com/my/login

Full programme on Sibos.com: https://www.sibos.com/conference/conference-programme/2015?field_session_stream_tid%5B%5D=466&op=Filter

Also see my recent interview on Sibos.com “Innotribe and the future of FinTech innovation”

Millennials and the future of finance: A different kind of trust

A generational shift is underway, which is challenging and reinventing notions of trust in financial services. The Millennial Generation, comprised of those people born between 1982 and 2004 (average age 22), lies at the heart of this shift.

Millennials_option 2

A couple of months ago, i spotted the twitter stream and website of Wharton FinTech, the first student-led FinTech initiative committed to education, career development and idea promotion by connecting innovative, established, disruptive and proven FinTech enterprises with students and industry professionals.

WhartonFintech Logo

I got into a conversation over Skype with Daniel McAuley and Steve Weiner, the two co-founders of Wharton FinTech, and discovered a rich community of young Wharton MBA students who were passionate about FinTech. They organise study tours in the Valley and elsewhere, have a solid blog, and more importantly have a refreshing view on which financial services resonate with Millennials and which not.

We started an online collaboration to produce a research paper, and after a couple of iterations quickly decided that the underlying theme had to do with trust. A different kind of trust.

Trust is the most important currency in finance. It is fundamental to the smooth running of every financial system in the world, and that is always likely to be so. However, a generational shift is underway that is challenging and reinventing notions of trust in financial services.

Growing up during the global financial crisis and a sluggish period of recovery thereafter, the Millennial Generation is particularly mistrustful of established financial brands and institutions. The effect of this generational shift has been explored by a number of groups, including the innovation group, Scratch. Their Millennial Disruption Index concludes that banks are most likely to be disrupted by Millennial consumer preferences, and are facing massive challenges in terms of approach towards customer acquisition and user experience.

Millennials believe that the way we access money and pay for things will be completely different five years from now. But how do companies understand what trust really means to this generation, and more importantly, find ways to earn and retain it?

The paper explores three main themes:

  • Trust in technology: Millennials trust technology rather than face-to-face relationships and the traditional ‘bricks and mortar’ on-premises user experience. They want entirely new digital products that are relevant to their daily lives. However, there is a fine line between trust in technology and over-reliance on it, and information and identity security is an area of risk that needs to be managed.
  • Trust in networks: FinTech startups built on the back of social networks have a distinct advantage over incumbents when it comes to customer acquisition. By focusing on user experience and viral or ‘word-of-mouth’ marketing, these young firms are often outperforming their better-funded rivals. For those financial services firms looking to gain market share within the Millennials segment, this is an extremely important approach to master.
  • Trust in social causes: Millennials demonstrate a stronger likelihood to buy a product from, or indeed work for, a company with a defined social or environmental mission. They trust companies with social or environmental objectives more than those that are perceived as operating solely for profit. While declaring affiliation to a social cause can attract customers and improve engagement, companies must be careful not to mislead Millennials – they tend to do their research to make sure a company’s claims can really be justified.

Socio-economic and generational dynamics play a critical role in the evolution of financial services. As companies reinvent the way people interact with their money, finance is becoming faster, cheaper and more efficient for individuals and businesses.

The paper can be downloaded here (PDF) and provides valuable guidance on what financial services companies can and should be doing to capitalise on this major generational shift in consumer preferences, and create new opportunities for growth.

Together with Power Women in FinTech, Millennials will play an important role in this year’s Innotribe programme at Sibos, taking place in Singapore from 12-15 October 2015. In preparation for the event and the discussions that will happen onsite at Sibos, the paper examines how the Millennial Generation will help shape the future of finance.

Powerwomen in FinTech

While technology and business models are changing fast, the issue of gender diversity in financial services – particularly at senior leadership levels – is still lagging behind.  A Financial News analysis of Dow Jones Venture Source and Factiva data reveals that, of the 20 European FinTech companies that received the largest venture capital investments in 2014, none had a female chief executive.

A couple of months ago (Nov 26, 2014), I got a DM tweet from @sammaule saying “Been asked to put together a list of top 100 women in FinTech globally for conference in March. Looking for your input.”. I reached out to Sam and suggested we’d make this a major design theme for Innotribe Sibos 2015, and produce a joint whitepaper on Powerwomen in FinTech.

It was the start of a fantastic collaboration with Sam and Christine Duhaime @cduhaime from Digital Finance Institute in Canada, culminating in the release of the paper on June 3, 2015 during at Digital Finance 2015, the first Canadian FinTech conference, in Vancouver.

We did not want it to be yet-another-list. We did not want it to be another girl-geek-power list. What we wanted was a list of women who make a difference in financial services. Whether they were having C-level roles in their organizations or were change agents deep in the fabric of their institutions. Whether they came from big or smaller financial institutions, startups, investors, or VCs. We had the ambition to have a worldwide list.

We compiled all existing lists. Did crowdsourcing via twitter and other social media. We had a good list, but found it a bit light for regions such as South America, Africa, and Asia. We reached out to our contacts in those regions, and got additional suggestions.

We ended up with a list of 437 Powerwomen in Fintech, and could have kept going.

women list graph

The paper draws upon existing research to highlight the reality of today’s situation in FinTech, and it provides recommendations to achieve and accelerate greater gender balance within the industry. A selection of interviews and profiles sit alongside the index, highlighting and celebrating the success stories of just some of the inspiring women who are leading the way and serving as role models to others.

End August we will do an update, and have some more in-depth interviews with 25 Powerwomen from the list.

The paper serves as an eye-opener on the gender diversity gap, in advance of the debate that will continue at Sibos in Singapore, from 12-15 October. Diversity will be one of the main topics covered by the Innotribe@Sibos 2015 programme. A number of the inspirational leaders featured in the Power Women in FinTech index will be involved in Innotribe sessions to discuss the findings of the paper, and make sure the voice of women is heard.

The paper can be downloaded and is a compelling read for anyone involved in the financial industry and beyond.

Fintech 1.0 is dead. Long live Fintech 2.0

There is a great new paper out called “The Fintech 2.0 Paper: rebooting financial services”. You can download it here.

fintech 20

The paper has been created by Santander InnoVentures, in collaboration with its partners Oliver Wyman and Anthemis Group.

It is mandatory reading, and it resets the bar on what innovation in financial services should be all about.

Maybe some history first. Sean Park (@parkparadigm) from the same Anthemis was probably the first who mentioned the idea of Bank as a Platform with a nice Prezi presentation http://www.parkparadigm.com/2009/10/29/platforms-markets-and-bytes/ in september 2009.

Since then we all have seen that story unfolding, up to some months ago where the slides from CB Insights went a bit viral.

Unbundling-of-a-bank-V2 by CB Insights April 2015

This is looking at the home page of Wells Fargo, but i have seen versions for HSBC and others. The message here was that we witness the disaggregation or uberization of financial services and that the new capability is to be able to horizontally source pinpoint functionality and mix and match these into new experiences. That was Fintech 1.0. It’s a vibrant startup space, and for sure full of investment, accelerators and incubators. But it’s boring and missing the big picture.

The new paper helps us seeing the big picture. From the foreword:

“Many fintechs have succeeded but today they are still operating only at the edges of banking. To help engineer more fundamental improvements to the banking industry, they must now be invited inside, to contribute to reinventing our industry’s core infrastructure and processes. That can succeed only as a collaborative endeavour, with banks and fintechs working together as partners.”

There are many examples in the paper that illustrate that. Here is an example of streamlining securities settlement:

Securities

However, many financial institutions are still stuck in the pre-Fintech 1.0 era: they just start to see the light that Sean Park was shining on the vertical disaggregation of financial services. That is seven years after the first signals were clear in the market. They simply have not adjusted their clockspeed to the 21st century economy speed.

Other institutions were more pro-active and created corporate investment funds (some of them 100-200M USD or more) and/or partnered with accelerators and incubators. Probably most of that money is gone now. And to be honest, i don’t see much innovation that is actually shipped into the market. At best we ended up with some well advanced prototypes and we struggle to get them out of the sandbox. To quote myself: “Innovation that does not ship into the hands of a paying customer is fantasy”

The new paper shifts the innovation agenda. All the problems and opportunities in the paper are of a collaborative nature. Maybe not in a way that the authors intended.

  • It looks from the paper that the conversation with startups has moved on from competing with the banks to collaborating with the banks. I can subscribe to that, it’s a clear message i have heard from the startups and the banks during all the startup competitions i have been invited to for coaching and judging.
  • But many of the problems and challenges in the paper can only be solved through a collaborative effort by the industry at large

Just a couple of days ago i was in a meeting with heads of innovation of major financial institutions. One of the messages was that we as an industry have to be more bold, set our competitive agendas asides and join forces to compete with the next generation of competitors that are not the startups at the edges but big technology companies with very deep pockets and with the super disruptive capability of becoming ecosystem/platform orchestrators where banks will rather be the slaves than the masters.

FinTech 1.0 FinTech 2.0
Products Processes
Tactics Strategy
Doing the existing better Do brand new
Efficiency game Value creation game
At the edges At the core infrastructure
Key Performance Indicators Key Capability Indicators
Vertical Horizontal
Competition Collaboration
Prototypes Shipped Products
Transactions Enable Commerce

The new paper inspires me. I got somewhat bored of hearing the startups doing the same standard pitches, and attacking/leveraging/whatever one particular area of financial services. I am hungry to see startups wanting to play the big game. The game of infrastructure. Of re-inventing processes rather and putting lipstick on or around the pig.

In that sense FinTech is dead. The game is up. It is about enabling commerce. It’s about better banks and better banking with a greater societal awareness to enable commerce and supply chain. Not just transactions in the back-office.

Innovation: from tactics to strategy

I was invited at the 7th Banking Innovation Forum in Vienna to speak on Innovation. The title of my talk was “Innovation: from tactics to strategy”

I have posted the deck on Slideshare

It was an interesting audience, with most people coming from Central and Eastern Europe, with some interesting case studies from Paolo Barbesino from UniCredit in Italy, Carlos Gomez from Activo bank in Portugal, Marcel Gajdos from Visa Europe Czech Republic/Slovakia, Efigence in Poland, and Wojciech Bolanowski from PKO Bank Polski. I made quite some notes, and if i find the time to make a post on it, i will.

Luckily, my fans are out there to help me. I planned write something about my talk as well, but Wojciech Bolanowski already did that in his great LinkedIn Post here. I have cut and pasted his post in its entirety, as it captures well what i was trying to convey in that presentation. Thank you so much, Wojciech, much appreciated 😉

+++ Start post Wojciech

Inspire other people, think differently, create spaces where people come alive, ship to customers; as well as bravery, prototyping, events, capabilities and clarity – these are ingredients for successful innovation within big organization; at least according to excellent speaker and Innotribe Co-founder Peter Vander Auwera.

How to innovate in the shadow of behemoth?

marriott

Peter spoke on the first day of 7th Annual Banking Innovation Forum by Uniglobal in Vienna Marriott Hotel (as pictured above). He was keeping the audience extremely focused and interested. The subject was complex and of great importance: how to make really BIG organization innovative. As Peter put it in an outstanding rethoric figure: “how to make babies”. I would like to add: how to make the babies when you are well-known, established, serious and successful one with huge legacy and obliging history.

The questions are (usually) much more important than particular answers, so there is not my goal to report Peters’s solution in details. What I would like to point out is the question itself. Today, in the fast-running world of fin-tech start-ups and quasi-banking innovators almost every bank is big enough to raise this question to itself. Is it enough to inspire other people with your disrutptive ideas? Is such inspiring even possible in organization too big to change itself spontaneously? What could possibly happen if you think differently from dominant thinking styles?

Obviously, being innovative within mammoth-size organization is a big challenge and requires specific attitude and social skills. As I understood one of the Peter’s suggestion is to create appropriate team which become the centre and engine of the process. The brave, capable team with clearly set culture of “rather be failing frequently than never trying new things” to quote Peter’s presentation. Some important tools to do so are special workspaces, integrating events and ways of building true alignment.

Bravery – the slide of the presentation. Source: Uniglobal

How to gain executives’ support?

The presentation was full of insider stories with some of them concerning interactions between innovators and the board members. Those were a great lesson of struggle which, I think, at least to some extend, any innovator should expect and be prepared for. The very useful take-out was about prototyping and commercial launching of innovative products. The prototype should be, according to Peter’s best practice, as vivid and identical with the final product as possible. No more “Power Point Prototypes” unless you would like to fail. What’s even more – prototyping is just a step to the real strategic goal – to deliver real, commercial product and give it to customers. “Go out of the sandbox” is another great statement I heard from the speaker. Indeed, today environment of fast growing and alternating product propositions demand being “on market”. The Grand Jury of customers has no time to screen through pilots or prototypes; every company should be ready to risk and show its innovation as soon as it is delivered. In my opinion this is extremely important to realize. Shipment to customers what is already prototyped is the crucial part of execution process in innovation. I feel it is striking and true, therefore I tweeted this immediately with hashtag #BAIF2015!

What about the reluctant middle-level-managers?

The next splendid remark is about mid-level managers’ attitude toward change. For them the main goal is “too keep any changes far away of the plan”. It is understandable and rational. For manager’s KPIs are target-related, they try to keep organization on the course to achieve them. However, any innovation process within organization creates the risk of change, which, possibly, could alternate plans and goals. This is the real challenge – to execute innovation in organization which mainly consists of medium-level managers. And execution itself is much more difficult and lasts much longer than whole creative process of gathering ideas, evangelization, internal promotion etc. What Peter stressed, and I agree fully, is thatin context of big organizations idea management process is easier and shorter than its incubation and implementation. In start-ups world there is exactly the opposite relation.

Start-ups as indicators

Start-ups in financial sector (dubbed fintech recently) occupied a lot of Peter’s presentation as he is involved in the well-known Innotribe@Sibos program. The event has attracted more than 340 participants this year. It is quite nice sample to show what’s going on in innovation. With four continental semi-finals (NYC, London, Cape Town and Singapore) it gives global overview and prime selection of activities. This could be a useful indicator for big companies to track the start-up trends and pick up something valuable from. For example in 2014 the leading areas of start-up activity were (despite a broad category of corporates/business services) investment management, lending, big data and personal financial management. It is a clear message to banks: there is innovation coming to your core businesses and it is technology-driven.

This post is inspired by presentation shown on of 7th Annual Banking Innovation Forum ; there is another one of this category, in case you are interested:

Collateral damage of 2008 – card revenues in CEE

Peter Vander Auwera on stage in Vienna. Source: Uniglobal

Linguistic disclaimer

I have written this text in English and I know my limitations. It is possible you find this post illogical, offending, unclear or too simplistic. It does not mean to be that way, so please blame it to my imperfect English skills. I am neither native nor perfect English speaking person . If you want to be helpful, do share your grammar, spelling, style and any other remarks with me. I would appreciate any contributing comment, especially if it came from native speakers.

+++ End post Wojciech