Ian McKenna: The fintech innovators making waves

Ian McKennaIf you want the crash course in all things leading edge in Fintech visiting a Finovate show can be time well spent, but it’s also an exhausting experience. The first two days of this year’s Fall show in New York involved no fewer than 80 demos of fintech propositions of all shapes and sizes.

Anyone looking for a crash course in how artificial intelligence might be deployed in financial services could do worse than spend a few hours poring over the various demos, there were just too many to list in a summary like this.

The Finovate team do a great job of putting videos of the presentations on their website soon after the event. These can be found here.  Even then watching them all online will take you over nine hours so here is my summary of the ones I think it will be most beneficial to watch depending on what you want to study.

Heads up for the regulator

Finovate covers a very broad church. If you are going to attend you will see a plethora of security solutions countless ways of replacing passwords, ways to streamline Anti-Money Laundering services and lots of start ups showing how banks can sell more stuff.  In my view, when pitching to banks too many presenters focus on banks selling extra services without also identifying consumer benefits of such additional sales. Consequently, I think regulators would find the shows a great way to get a heads up what they should be looking out for in the future.

WealthTeach gems

Within it all you will also find typically a handful of jewels in the WealthTech space and this show was no exception indeed several were particularly notable. For those who want to focus on the services directly relevant to the savings market I would highlight the following (click on the links below to watch the relevant videos):

Access Softek gave a great demonstration of how a simple Robo advice proposition can be plugged in as a component to a wider banking and personal finance website. Not everyone will appreciate this approach but I can see many areas where it makes sense and is a further reason why the Open Banking project should be extended to Open Personal Finance as soon as possible.

This is also another demonstration of why advisers should be talking to their software suppliers about how they can build Open Banking services into their client portals and apps. Advisers should watch this video as an example of what banking services will look like soon and how banks will target adviser customers with pensions, investments and mortgages, if advisers do not enable clients to see their banking information via their advisers offering.

Microsavings services that enable you to save by rounding up credit or debit card payments to the nearest whole amount are increasingly common but I have never seen this done with physical cash in the way that Bucket Technologies do. While in UK only 40% of transactions are still in cash, half the 80% global average, 99% of cash transactions result in people getting coins, which are cumbersome for the consumer and expensive for retailers.

The company have created a blockchain based digital piggy bank. While not the use case the company were pitching I see this as having huge potential in the financial wellness market where it could be linked to retailers to help consumers save their small change which could then be transferred to an additional pension, investment or savings contributions as the digital equivalent of keeping coins in bottle or a jar until they reach a value. I think any workplace pension provider with schemes for larger retailers should be exploring this.

Systelos showed a fresh approach to how advisers can demonstrate the added value of human advice over digital, highlighting both the behavioural and financial benefits of advice to help firms customise their proposition for every client. It includes a recommendation engine to bring the solution together and visualise far more about how the adviser adds value and also demonstrate that all a client’s needs have been met. It clearly calls out situations where advisers have decided no action is the right action.  For me this was the most interesting demo of the whole show and probably the one that will resonate most with Money Marketing readers. This service could be very valuable for UK advisers.

That said, BlueRush were not far behind with their excellent ways of adding personalised voice and video to existing content and tools using their Individeo service. This is the sort of technology we really need to be thinking about for services like Pension Dashboards and the planned Protection Calculator. While it is really important to bring all this information together for consumers that is only half the battle, we will not achieve the level of engagement we want if the information is not presented in an engaging manner.

I have recently seen another company working on something similar in the UK for their own tools set but what impressed me about, and differentiates, BlueRush is their ability to apply this capability to existing software. This is a great way to drive out more value and use from existing assets and having investigated their offering more since Finovate they have an impressive range of tools that can be applied to pensions, savings, life insurance and mortgages.  Companies who have used their technology so far have seen a 40% increase in conversion from online enquiries.

For an overview of the full potential of app-based services for banking customers it is well worth having a look at Tinkoff the Russian bank. Describing themselves as a customer centric financial and lifestyle ecosystem offerings from the main UK banks look embarrassing by comparison. Even our challenger banks could learn a lot from this service.

The other really stand out service of the whole event for me was Golden, a service designed to help baby boomers and generation X make sure their parents are not being ripped of by cyber criminals and other fraudsters. At the same time it is a really powerful solution to address the challenge of intergenerational wealth, where only 10% or parents wealth stays with their advisers when children inherit.  This is a very powerful solution to important needs for both families and their advisers.

Praise for the FCA

Until last year Finovate was all about the demos. Last year a number of the shows were extended to four days with added, more traditional, conference sessions on the later days. This year the extra days have been evolved to an extra conference day and separate focused events on day four. I found this much better and the UK FCA came up for a lot of positive comment particularly around Sandboxes and GFIN.

This was also true at an additional event I attended while in New York organised by Innovate Finance and Hogan Lovells. This provided an interesting contrast between the US and UK approach to regulating fintech. Essentially the view was in the UK we have more rules but also a lot more regulatory certainty. Overall this was felt preferable. Perhaps there is a case for being careful what you wish for when asking for less regulation.

Strong views were also expressed that Europe is a long way ahead when it comes to data regulation with GDPR being seen as a very positive development. Data security, or rather any lack of it was seen as a factor that will increasingly inhibit partnerships if all parties cannot be satisfied. This particularly resonates with me in the context of how life companies and platforms are responding to the increasing number of advisers who are rightly implementing email encryption services. Institutions need to accept that they cannot dictate the security mechanisms their partners select. I expect this to become a big issue in the coming months.

Ian McKenna will be exploring in more detail how the above services and others can help transform the financial advice market at FTRC’s forthcoming Adviser Forum in London on November 22nd. If you are interested in attending please contact Samantha.Smtih@ftrc.co.uk  

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  1. […] Ian McKenna highlights six Finovate alums – Access Softek, Bucket Technologies, Systelos, BlueRush, Tinkoff, and Golden […]

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