Cracking the fintech code
Download the latest Finovate eMagazine, focusing on the highlights and lessons learnt from 2018 and the trends that will uproot the industry this year.
Cracking the fintech code
As 2019 get's into full swing, we wanted to take one last look back at the highlights of the last few months of 2018.
Our multimedia eMagazine visits with industry analysts at FinovateFall, studies the value of bank-fintech partnerships, reviews important trends to consider before the year comes to an end, and more.
We’ve packaged all of this in a slick, new format focused on the user experience. Enjoy!
Interviews with the key speakers of FinovateFall
Make the most of bank, insurance and fintech partnerships
View your career as marathon, not a sprint
Who are the fintechs to watch this year?
Watch the winning pitches and pick up some tips
David Penn, Research Analyst, Finovate
Julie Muhn, Senior Research Analyst, Finovate
Matt Armstead, Executive Director, FinTechAccel
Jon Zanoff, Managing Director, Techstars
Pini Yakeul, CEO, Optimove
Christian Zimmerman, Co-founder & CEO, Qoins
Andrew Boyajian, Head of Banking, North America, Transferwise
Mary Jane Ajodah, Vice President, Operations Strategy, BNY Mellon
Hear it from the experts
Interviews with the speakers of FinovateFall
FinovateFall welcomed over 70 start-ups to demo exciting new products and ideas, and opened the stage to pioneering thought leaders to discuss the future of finance, technology and how the two come together to solve real world problems.
We sat down with leaders of inspiring startups to get their insight on what the recipe for success is in this often overcrowded space.
Matt Armstead, Executive Director, FintechAccel gives his advice to startups and explores why getting a great team behind the idea is critical
Jon Zanoff, Managing Director, Techstars, explores why diversity of thought and team dynamics is crucial in startup culture.
Pini Yakeul, CEO of Optimove, on how AI helps with segmentation, prediction and optimization within marketing.
What makes a good FinTech start-up?
- Industry experience
- Revolutionary idea
- Level of investment
We spoke with Christian Zimmerman, Co-founder & CEO, Qoins about giving consumers data and knowledge to get them engaged with fintech.
Andrew Boyajian, Head of Banking, North America, Transferwise opens up about the regulatory challenges Transferwise faced when launching borderless accounts and a new debit card to hold multiple currencies.
One of the big challenges has been working within confines of outdated regulations... some markets have the idea that fintech companies should not be allowed to participate in any type of e-money or stored balance. Every market is different and has unique views... we talk to them as they come.
Andrew Boyajian, Head of Banking, North America, at Transferwise
Generating value from bank, insurance and fintech partnerhips
What does it take to generate real value from partnerships between incumbent banks and fintechs?
A recent panel at FinovateFall discussed the idea.
The panel opened by exploring the concept of emerging technology, and given that a lot of fintechs rely heavily on new and developing technologies it was a pertinent starting point.
Nathalie Dore, Chief Digital and Acceleration Officer at BNP Paribas Cardif stated that for her, emerging technology consists mainly of "deep tech" which specifically impacts insurance businesses by decreasing risk for their customer base. Michael Roberts, Chief Marketing & Digital Strategy Officer at Bank of America Merchant Services, added that it can go beyond this and means technology which meets the emerging needs of the customer base itself. As the other panelists, Matt Ribbens, SVP Enterprise Digital Strategy at BB&T; Dave Mooney, President and CEO at Alliant Credit Union; and Travis Skelly, Senior Vice President, Venture Investing at Citi Ventures went on, their objectives became clear. Many of them focus on improving the client experience and anticipating new demands, effectively making the business more customer centric. Mooney summed it up, "it's less about the newest technologies, but about the application of them".
So with this revelation came the next question, "what types of technology and partnerships are being invested in and prioritized?"
Ribbens kicked it off by announcing his company's , BB&T's, commitment to investing $50 million in fintech, explaining this is a large part of their accelerated digital transformation program. Dore listed off some of BNP Paribas Cardif's key start-up investment areas, including blockchain, AI and IOT. She described the key to their investment strategy was always doing a project with the startup they invest in, "we don't just do the investment and then wait for financial return, we want a learning curve of the technology. For the startup, this is also an acceleration for them... It's a win-win situation."
In many cases, the partnerships that we strike have to leverage the brand of the startup in order to have credibility with the marketplace.
Michael Roberts, Chief Marketing & Digital Strategy Officer at Bank of America Merchant Services
Roberts explained their strategy was two fold; first getting back into channels they had previously been cut out of by competitive software companies, and second, embedding their own features and offerings through fintech.
Mooney added that their primary objective when it came to partnering with fintechs was learning, "specifically, how to work with fintechs... as the situations and motivations [between banks and start-ups] are very different, and reconciling those differences is important". He went on to say that while they had "modest expectations" for the financial gain, they did see the partnerships as having a direct financial benefit.
Skelly continued that, from Citi Ventures' perspective, they invest in early stage companies (and not just start-ups) with the goal of commercializing with Citi and their clients, and looking for the tangible results of cost savings and revenue generation. He then went on to explore an interesting idea that, through these same partnerships, fintech startups are coming to understand that there are reasons why banks can find it hard to partner up, from "not having security procedures up to snuff and not having regulations to abide by." He closed by stating that while indeed there are learnings for banks working with fintechs, there are also learnings for the startups to process when trying to partner with banks, too.
Moderator George Anderson, CEO & founder at Ninth Wave, finally posed the question: what is driving the investments for the organization and how do you make it a success?
Mooney said it was critical that organizations go into partnerships knowing what they are looking to accomplish, and that this can vary a lot - from direct financial gain, access to new markets and reducing expenses through efficiency gains. Once a bank know what it's looking for this should drive the investment.
For Dore, they ensure they run "innovation pilots" with clear KPIs which they share with the startup. Ribbens agreed, and added that the key was in proofs of concepts, "you don't want to take a risk on an idea you don't know you can get to the finish line with."
Travis concluded the panel with, "in areas where the business is strong, I've seen great appetite from the leaders to experiment with innovation and start-ups to maintain that position... On the other hand, I've seen where we're not as strong a similar mindset because "why not?"... It's the two ends where I think you'll see more experimentation now and in the future."
Fintech Global: Emerging Markets, Emerging Trends
David Penn, Finovate Analyst
Our weekly column, Finovate Global, aggregates fintech news from developing economies around the globe. Here, we’ll take a look at some of the biggest fintech trends from three regions in particular: Central and Eastern Europe (CEE), Latin America, and the Middle East and Northern Africa (MENA). The goal is to highlight the ways in which countries in different parts of the world are leveraging financial technology to improve the financial lives of their citizens as well as promote economic development and modernization.
Central and Eastern Europe (CEE) – Betting on the Blockchain
For years, the story of fintech innovation in Central and Eastern Europe was a story of digital transformation in the wake of countries emerging from the shadow of Soviet-style communism. This has enabled banks across the region to take advantage of not just newer technologies like mobile and cloud-based banking, but also technologies like cryptocurrencies and the blockchain.
One such CEE-area firm that is doing interesting work with blockchain technology is Poland’s Alior Bank. Earlier this year, the institution announced that it would use a blockchain network as an electronic notary to remotely and transparently verify the integrity of bank documents. This summer, Alior Bank sponsored a blockchain-related hackathon (called a blockathon) and offered a challenge to build a decentralized digital identity solution that would support the use of smart contract technology.
More recently, Poland’s largest bank, PKO Bank Polski, announced that it was teaming up with U.K.’s Coinfirm to improve customer data security by providing blockchain-issued paperwork – specifically changes to product regulations - to its account holders. Interestingly, the bank sees this embrace of bleeding edge technology as just the most logical next step of its digital transformation journey.
“Blockchain has great potential to increase the competitiveness of the Polish banking sector,” PKO Bank Polski VP of the Management Board, Adam Marciniak explained. “PKO Bank Polski (is) successfully implement(ing) a strategy focused on digitization, and the full implementation of the blockchain-based solution is the next step on the path chosen by us, which strengthens our position as a technological leader in Polish banking.”
Our Theme Cloud of recent CEE-area fintech headlines shows both the region’s emphasis on cloud and mobile banking as well as its pursuit of newer technologies like the blockchain and cryptocurrencies.
Five Central and Eastern European Fintechs to Watch
- Bankera (Lithuania: 2017): Neo-bank for the blockchain era. Vytautas KaraLevicius is CEO.
- Billon (Poland: 2012): Blockchain technology company focused on real world solutions. Andrzej Horoszczak is founder and CEO.
- Crypterium (Estonia: 2017): “The world’s first mobile crypto bank.” Marc O’Brien is CEO.
- Cyber Productivity (Poland: 2014): Real-time accounting solution provider for SMEs. Rafal Strzelecki is CEO.
- NF Innova (Austria: 2013): Opti-channel banking solution provider. Vasa Segrt is CEO.
Latin America – Mexico Lays Down the (Fintech) Law
In Latin America, like much of the developing world, there is a growing interest in leveraging financial technology to provide banking services to the underbanked. Fintech analyst Chris Skinner suggests that part of this drive has to do with the relationship between Latin American governments and their financial sectors, which tends to be resistant to “new entrants and innovation.” As such, he noted, 40% of fintechs in some of the more advanced economies of Latin America (in Argentina, Brazil, Chile, Colombia, and Mexico) are focused on the unbanked and the underbanked.
There are many ways fintechs can help serve the underbanked and providing credit and financing on good terms is high on the list. Columbia Fintech noted that only 11% of Latin Americans have access to credit from the traditional financial sector. Companies like Kueski and Konfio in Mexico, Cumplo in Chile, Creditas in Brazil, and Afluenta in Argentina are among those firms that are using crowdsourcing and marketplace lending to help individuals and SMEs in their respective countries secure affordable financing.
But the region’s biggest fintech news in the second half of 2018 is undoubtedly the fintech law passed by Mexico. The goal of the new legislation is to drive fintech innovation by clarifying “grey areas” in financial regulations, supporting trends like Open Banking and open APIs, and providing a regulatory sandbox program for fintech startups. The law is based on the principles of financial inclusion, consumer protection, financial stability, competition, and the prevention of money laundering. Further, the legislation seeks to enable firms to leverage new technologies to improve investment and financing – including via crowdfunding platforms - as well as the use of electronic payments and authorized cryptocurrencies.
From providing financing to small businesses to the growing effort to bring credit opportunities to the region’s un- and underbanked, our Theme Cloud of recent fintech headlines from Latin America reveals lending as a source of fintech innovation in the area.
“It is expected that, in the short term, the remaining LATAM countries will make a qualitative leap, and define their regulatory framework which will develop innovation throughout the region and allow the financial sector to evolve,” said Miami, Florida-based Above and Beyond Tech CEO Jorge Ruiz in an editorial supportive of the Mexican fintech legislation. “Despite some resistance from traditional banking, the industry is moving towards a more efficient business model of interconnected systems leveraging Financial Institution-Fintech partnerships. In Latin America, as an emerging market, financial inclusion is possibly the greatest benefit to emerge from these changes.”
Five Latin American Fintechs to Watch
- NuBank (Brazil: 2013) Neo-bank and fintech. David Velez is CEO and founder.
- GuiaBolso (Brazil: 2012) PFM platform andcredit marketplace. Thaigo Alvarez is founder and CEO.
- Konfio (Mexico: 2013) Online lending platform for microbusinesses. David Arana is founder and CEO.
- Ripio Credit Network (Argentina: 2013) Bitcoin and digital payments for business. Sebastian Serrano is founder and CEO.
- Tpaga (Colombia: 2015) Mobile wallet and payment solution for the underbanked. Andres Gutierrez is co-founder and CEO.
The Middle East and North Africa –Partnership Paves the Way Forward
There are many things that characterize the rise and spread of financial technology in the MENA region: the role of cross-border commerce and the need for efficient transnational payment and remittance services, a growing interest in blockchain technology, the key role of Islamic and Sharia-compliant banking … But if there is one factor that makes the MENA region seem relatively unique compared to others, it may be the pro-active – almost activist – role governments and government-supported agencies play in driving and shaping fintech innovation in their regions.
In general, banks in the MENA region have put their money where their fintech aspirations are. Fintech News Middle East notes that FIs like Emirates NBD have committed AED 1 billion ($272 million) over the next three years to drive its own digital transformation. And it’s not just a matter of money. In Bahrain last year, 11 regional banks joined the world’s first shariah-complaint consortium. The goal of the organization will be to develop 15 new fintech solutions within five years.
Add to this the role of governments and government-sponsored “special economic zones” in the Middle East are playing in the advancement of fintech. The exceptional development of the fintech ecosystem in the UAE, for example, has been credited in part to ambitious initiatives and generous support of fintech startups on the part of the public sector. Entities like the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Center (DIFC) provide the UAE’s rapidly growing fintech ecosystem with regulatory and structural support, as well as a business-friendly economic climate that enables fintech startups to develop their solutions in partnership with major financial institutions.
Other nations in the area are attempting, in their own way and scale, to do similar things for their own nascent fintech industries. This summer, Iraq’s Central Bank announced a collaboration with Mastercard, and Saudi Arabia approved its first pair of fintech licenses authorizing two firms – Manafa Capital and Scopeer – to offer crowdfunding investment services.
Many of the themes that drive fintech innovation in other emerging markets are present in the MENA region, but the Middle East and North Africa also provides unique opportunities for fintechs that develop Islamic-focused and Shariah-compliant solutions, as our MENA fintech Theme Cloud above shows._
"The Ministry of Finance continues to support and encourage innovation, and (to) provide the right environment in which it can flourish,” said UAE Minister of State for Financial Affairs, Obaid bin Humaid Al Tayer earlier this year. “Our efforts sit within the framework of the national innovation strategy, contributing to the UAE Vision 2021. We support the efforts to see the UAE government recognised as the world’s most innovative and we continue to nurture innovation by adopting innovative business mechanisms and funding innovators in various fields."
Five Middle Eastern/North African Fintechs to Watch
- Aqeed Technology (UAE: 2017) Insurtechinnovator. Hadi Radwan is founder.
- Compareit4me/Yallacompare (UAE: 2012) Financial services comparison platform. Jon Richards is CEO.
- Liwwa (Jordan: 2013) Marketplace lending platform for SMEs. Ahmed Moor is CEO.
- Moneyfellows (Egypt: 2014) Social financing and savings platform Ahmed Wadi is co-founder and CEO.
- PayTabs (Bahrain: 2014) Payments processing and fraud prevention company. AbdulAziz Aljouf is CEO.
Women in fintech: Mary Jane Ajodah
View your career as marathon, not a sprint
Mary Jane Ajodah covers fintech and emerging technology within the Client Service Delivery Strategy Group at Bank of New York Mellon. Her responsibilities entail developing use cases for emerging technology with various business areas, identifying and driving opportunities for partnerships with third parties, and articulating a strategic vision around new technology for operations. We speak to her about her career path and her words of advice to the future women in fintech.
How did you start your career?
I started my career in IBM’s internal strategy consulting practice. I worked on several projects core to IBM’s reorganization and transformation, including the launch of the IBM Digital business unit. I gained invaluable experience at IBM, particularly around how innovation and change are executed in a mature enterprise.
In late 2015, a recruiter from BNY Mellon reached out to me on a role focusing on fintech within the bank’s Operations Strategy team. Around this time, interest in topics such as ‘enterprise blockchain’ and AI was accelerating, with a great deal of discussion around the future role of custodians and other financial intermediaries. It was a unique opportunity and key point in time. Since joining, I’ve worked on a number of projects related to BNYM’s overall growth and innovation strategy. I’ve also appreciated the opportunity to cultivate our relationships with startups and VCs where there is mutual benefit.
The recurring theme for both of these roles has been driving change within enduring organizations (IBM at 100+ years, and BNY Mellon at 234 years). Mostly, I’ve been fortunate to have learned from inspiring senior leaders, and to have worked with excellent teams.
What sparked your interest in fintech?
I was interested in both finance and technology separately, and my current role brings both together. I studied economics and international relations at NYU, and wrote my undergraduate honors thesis on sovereign debt and default. As I started my career, I wanted to ensure I had a skill set that would endure over the long-run – understanding the impact of technology on changing business models is a core component.
What was your lightbulb moment?
I’ve had a few lightbulb moments on specific projects during my career, generally uncovering some root cause or issue and proposing a solution after interviews with various stakeholders and subsequent analyses. It is very rewarding when those moments happen.
The ability to contribute consistently and effectively over time, and put in the intensity where it is truly needed is crucially important.
What inspires you?
Travel inspires me the most. I like to do a lot of solo travel, and have visited a lot of cool places. I visited Svalbard, the last human settlement before the North Pole, when it was 24 hours of night. This trip inspired an Off-Broadway show that I wrote and produced this past July — “Savage Force.” We sold out for all the nights of our run.
I am inspired the most by those that can be successful in multiple fields of endeavor – Fridtjof Nansen – who discovered most of the Arctic, along with being a scientist and diplomat, is one of them!
Why is the #WomenInTech movement important?
My generation has tremendous opportunities thanks to the success and contributions of the women of generations prior. During the time I spent both at IBM and BNY Mellon, there have always been senior women at the highest levels of management with tremendous energy, experience, and knowledge.
What piece of advice would you give women starting their careers in fintech?
View your career as a marathon, not a sprint. The ability to contribute consistently and effectively over time, and put in the intensity where it is truly needed is crucially important.
Watch Mary Jane's full interview
Catch up on all the interviews with the inspiring women from our Finovate events, visit:
Best of show
These startups know how to deliver a winnning demo
FinovateFall welcomed over 70 startups to demo exciting new products and ideas, and opened the stage to pioneering thought leaders to discuss the future of finance, technology and how the two come together to solve real world problems.
Watch the Best of Show winners of FinovateFall and pick up some pitch tips to improve your next round of funding or sales call.
Once again Finovate proves the best event to connect with innovative minds.
Gabriel Ossi, Unicredit
Banzai's financial literacy solution uses a choose-your-own-adventure simulation allowing people to make decisions and experience consequences in a fun, safe environment.
Bond.ai's 'empathy engine' -- a human-centered AI platform -- closes the gap and disconnect between banks & consumers.
Bumped gives easy access to the stock market for over half the population who doesn't traditionally invest by allowing them to own the brands they love.
Golden's financial assistant app helps the 75 million baby-boomer adults managing the finances of 50 million senior parents.
Meniga targets lack of customer engagement and loyalty and uses internal and 3rd party data to drastically improve the digital banking user experience for bank and financial institution customers worldwide.
Who won your vote as top Best of Show winner at FinovateFall 2018?