Last month we attended the Innovate Finance Global summit 2018 in London and after talking over the highlights of the summit with the team at ALCMY we felt it was worthwhile sharing some of the key insights we found interesting.
Innovate Finance is a not-for-profit that advances the country’s leading position in the financial services sector by supporting the next generation of technology-led financial services innovators.
Reconnecting with the customer
The pace of innovation in the finance industry has always been known to be notoriously slow. In the recent years, we’ve seen an introduction of new technology such as mobile apps and contactless payments but the model of customer engagement and experiences hasn’t changed i.e. the banks dictate the terms of engagement.
This is however about to change with the Open Banking directive(UK) and Second Payment Services Directive (PSD2) which will force banks to open up banking data in a secure way so that it can be shared more easily between 3rd parties. Open Banking will completely change how we perceive, use and move money thereby relinquishing power back to the customer.
There was a recurring theme of focusing on delivering an outstanding customer experience in most of the panel discussions. Disruptive businesses are focusing on the customer experience to differentiate themselves from their competition. Challenger banks such as Starling Bank are partnering up with technology firms to deliver a customer first financial experience.
FinTech companies are playing a major role in shifting this competitive landscape by re-imagining and reshaping customer expectations by fundamentally changing how financial services are structured, provisioned and consumed. Open Banking and PSD2 is a dream come true for these companies as they will have more insight into customer data that has always been locked away from the public eye. This will enable them to provide more personalised products and services to their consumers.
In the recent years, Artificial Intelligence (AI) has gained prominence as the next technology enabler of disruption and innovation in organisations as they explore on how to future-proof their product and service propositions.
AI was at the heart of most discussions at the summit. The topics ranged from how AI will shape the future of work and mobility, ethics around the technology and scaling AI within organisations just to name a few.
Fintech companies are already embedding AI at the core of their product and services. These organisations have found unique applications of AI in Fraud detection, credit card decisions, market risk analysis, insurance contracts and many more to deliver value to their customers.
One outlier application of AI that we found particularly interesting was in regulation. Regulatory bodies are already applying artificial intelligence to supervise and ensure companies are compliant with the rules and regulations they have set.
In the new age of Open Banking, artificial intelligence will play a major role in personalising products and services thereby bringing more connectedness between banks and customers.
With the rise and fall of cryptocurrencies, Fintech companies are looking at different applications of the blockchain technology within the financial industry.
Even though most of the organisations are in their early phases of applying the technology, there was a great sense of optimism on how blockchain will revolutionise the financial industry both from a business strategy standpoint and day to day transactions with customers.
There already startups leading the charge in harnessing open blockchains to deliver innovative solutions for smart contracts, microlending, smart identification services for banks and many more.
This has been a hot topic of discussion across society with the financial sector being one of the worst culprits when it comes to addressing equal opportunities and equal pay for women.
With stats such as 29% of staff and only 17% of senior executives in the Fintech industry being women, it was clear why the World Economic Forum(WEF), best known for its annual gathering in the Swiss resort of Davos, said it would take 217 years for disparities in both pay and employment opportunities of men and women to end.
Executive accountability was the main recommendation that was echoed by most of the panellist discussing this issue. There has to be a named executive that is held responsible for addressing equal pay and equal opportunities for women with clear performance metrics and targets that will be measured and held accountable for.
In an industry dominated by millennials, we should take up arms and aggressively start addressing issues on gender equality. We cannot wait 217 years to get this right. The time is NOW!
Innovation and Disruption
As a bonus, we thought we should share some of the companies that are leading the charge when it comes to innovation and disruption. As a technology company, we were truly inspired by the companies below.
Lemonade is on a mission to disrupt the Insurance industry by focussing on the customer needs. See below
DataRobot is an automated machine learning platform that helps organisations to solve complex business problems by finding the best predictive models from their data.
With PSD2 and GDPR on the horizon, DataRobot is helping financial institutions to automate reporting of models to support the changing regulatory environment to ensure compliance.
Starling Bank is an online challenger bank that is disrupting the traditional banking model to make it easier for people to manage their money. It was clear from most of their discussions that they are taking a customer-first approach to delivering financial services.
There were lot more discussions at the summit that we couldn’t cover in this short article. The talks and roundtables were inspiring and thought-provoking on the future of the finance sector. Check out the highlights of the event here (https://ifgs.innovatefinance.com/highlights/).
We look forward to attending Innovate Finance Global Summit 2019.