Growth, Innovation & Leadership (GIL) Community


Reflections on FinovateFall and What’s Next in FinTech

by Clare Walker 05 Oct 2018
Share this:

Four days of information and interaction, including two full days of demos from almost 80 financial technologies companies – from crypto to credit solutions – can take some time to process. The majority of the companies that presented and participated at FinovateFall 2018 in New York last are aiming to help banks improve the customer experience. Personalization will continue to advance, and many see this as the key to success in the next five to ten years. The technologies that banks and other financial institutions (FIs) are currently utilizing, such as Machine Learning (ML) and Artificial Intelligence (AI) are helping to advance digital interactions with human-like assistance and knowledge, automate and secure processes, and deepen engagement across channels – just to name a few.

Eliminating friction for consumers and employees, increasing security, improving customer engagement – how we get there is the question many of the fintechs are trying to answer. It can be a daunting task to standout when one is presenting among 38 others in a few hours’ time. Whether you do can depend on the attendees’ needs – if they are from an FI looking for a new security solution or if they are a venture capitalist (VC) looking for the next app that can go from B2C. The demos were overall very interesting for this first-timer; to gauge exactly where we are and get a taste for what is on the brink of substantial adoption.

Best in show – differentiation is difficult

A lack of differentiation is an issue for banks. It can be an issue for fintechs as well – which one(s) will be able to integrate into the banks’ systems seamlessly? The winners of best in show reflected the variety of companies included at Finovate, and exemplify what resonated with the audience.

Bond.AI, represented an obviously popular technology area among presenters for the last few years. It is an example of AI getting to the next level with an “Empathy Engine.” It can give recommendations, be more conversational, and can be used across channels. It helps the bank better understand user behavior and, in turn, encourage users to improve their financial health. FinnAI and Clinc are two other examples (of a few) of companies focused on conversational technology.

Banzai was unique in its focus on educating people, particularly junior high and high school kids, about personal finance. It has “industry-leading, turnkey, CRA (Community Reinvestment Act) eligible, experience-based learning solutions that help users master personal finance.”

Two other winners, both of which also stood out to me as a consumer, were Bumped and Golden. Bumped features technology that enables brands to give their customers free stock for their purchases, with the goal of “turning loyal shoppers and spenders into shareholders.” Golden is a “financial caregiving” app and website that allows adult children to take care of their aging parents’ bills and finances. Golden estimates that there are 75 million baby boomers who are taking financial care of their 50 million senior parents – a good example of solving a real world problem.

Finally, there was Meniga, the four-time winner which offers white-label digital banking solutions that “enable banks to build customer engagement and help customers improve their financial lives.” The demo featured the “money monster” which helps customers save by “stealing” random amounts of money from their current account and putting it in savings.

Other standouts include Crypterium, which makes crypto as easy to spend as cash at merchants. Open Bank Project, a company based in Europe that has an open Application Programming Interface (API) for banks to enhance their digital offering quickly using an ecosystem of third party applications. Billshark also received attention for its B2C bill reduction API, which enables consumers to negotiate or cancel costly subscriptions.

There was a slew of security and authentication companies as well. This is clearly top of mind for FIs. According to Onfido, which demoed a facial check with video, “identity is the new currency.” There was also Face2Pay, a literally-named Russia-based company, and many authentication solutions (e.g., Arcanium Technologies, Biometric Signature ID, ID R&D, Secured Touch, Dual Auth).

Payment innovation came from Spreedly and Sezzle, and regulatory solutions from Ocrulus. Loan and credit solutions were there in force as well, to include LendIndex, Credivia, ItsCredit. Launchfire made waves with its game-based digital education system, and Simpler Trading aims to soften the learning curve for traders. More specific issues, such as the expanding gig economy is starting to be talked about more, e.g., Vaultz’s SmrtSvr helps independent workers with their taxes. 

Integrate and innovate

A bit of a disconnect remains between the technology being created and what banks can actually implement, but there were startups looking to fill the gap this year. There were solutions that could integrate into legacy systems with APIs, helping banks solve this ongoing problem; “seamless as a selling point,” as Greg Palmer, Vice President of Finovate, put it. Fintechs are now looking at all aspects of transformation, not just customer facing technology.

The constantly improving technologies are being applied to the FI’s pain points. Mr. Palmer talked about most of the fintechs at Finovate having a core value proposition around four basic tenets: increasing the bottom line, eliminating a pain (e.g., compliance/regulatory), the ability to offer something new (e.g., a service from a small credit union that can now compete, a new product to pass through to customers), and those looking for funding.

Some of the fintechs that are innovation around implementation integration were eBankit and Round Pegs, a platform that helps a bank take an idea and see it through by specifying the real world requirements – the people, metrics, and investment.

Mr. Palmer talked about “two dollar bill fintech,” solutions that are cool, but as of yet unproven on a large scale. These companies can move out of this space; the challenge is “getting over that hurdle to that massive distribution level.” He noted that the smaller banks and credit unions, often with fewer resources, is where fintech can really catch on. Events like Finovate can open up fintech and innovation to these groups, and as “solutions become more mainstream, consumers will see more of the benefit.”

Murkiness in regulation

One of the topics that seemed to be more on the margins was regulation in the United States (US). There is ongoing uncertainty around how regulations are likely to change. The unpredictability may be causing some low level fear as things could “change very suddenly and open up avenues or make existing technologies obsolete overnight,” says Mr. Palmer. Regulations have the power to dictate who will win in the marketplace. 

There was some potential for clarity a few months ago when the US Office of the Comptroller of the Currency (OCC) released a report announcing that it would accept national banking charter applications from fintech companies. At the moment, most fintech companies operate under state regulations that usually vary in each jurisdiction. However, since then, the New York Department of Financial Services has filed a lawsuit against the OCC claiming that they cannot offer national bank charters to fintech companies because the OCC does not have the authority to regulate them if they are not in fact banks. It is a federal vs. states’ rights battle, and the lawsuit could be a harbinger for fintechs that there may be a fight to get the regulatory pieces they need.  

Summit day – a deep dive

The AI and Blockchain Summit Day was developed for FinovateFall to discuss whether banks’ pain points are being eased with the use of these technologies. They will be “a good use of time and resources if it brings tangible results,” says Mr. Palmer. Blockchain is currently being used in many other areas, e.g., supply chains, so increased adoption in banking is coming. As one might expect, the focused topics and demo companies for Finovate are chosen based on data. According to Mr. Palmer, they aim to reflect the current trends out there on the stage. They use feedback from attendees and there was “massive amounts” of interest in AI and Blockchain. Summit Day, new this year, was created for those who really want the deep dive. The focus was real world examples of AI and Blockchain in banking. It is clear FIs see the value, but overall, many are still in proof of concept or experimental stages. 

The most important asset in today’s economy has changed – it is now data, according to Alex Tapscott, the author of Blockchain Revolution: How the Technology Behind Bitcoin and Other Cryptocurrencies is Changing the World, and one of Wednesday’s keynote speakers. AI and Blockchain can help with this; providing banks with cleaner data and aiding in the ongoing pursuit to “know your customer.” They have myriad other functions in banks as well, including securing identities, and deepening customer engagement and personalization across channels, on the front end. On the back end, it can automate processes and help in fraud prevention and detection.

Many FIs have been using Blockchain through IBM’s HyperLedger technology as a fabric. There was also a use case featuring intercompany forward exchange contracts in Africa, a scalable solution where no reconciliations are required. Additionally, JP Morgan recently announced the expansion of its Interbank Information Network, the first live Blockchain service offered by the firm, which removes delays in the global payments process and is built on Quorum, a permissioned-variant of the Ethereum Blockchain.

Global view

Up next for Mr. Palmer and Finovate team are FinovateAsia (in Hong Kong October 29 and 30) and FinovateAfrica (in Cape Town November 27 and 28). This is the inaugural Finovate event in Africa, so it will be interesting to see how things play out there, and if different themes emerge.

In Hong Kong and Southeast Asia, Mr. Palmer noted that there is a consumer willingness to engage with fintech on a daily basis. Average consumers are still going into branches here in the US. Clearly this is shifting, but in Asia, a fintech can get millions of users much quicker than in the US. The scope is enormous, with the population and those that engage with technology, there is “incredible opportunity there,” says Mr. Palmer. There are the same basic pain points for banks globally, but innovations can vary depending on how the consumers adopt the technology. 

At FinovateEurope, which takes place in London February 12-15, there is usually a mix of companies from the United Kingdom, European Union (EU), countries outside the EU. Because all of the companies operate under different regulatory constraints, they tend to have different approaches to how they do business and solve problems. There is an environment where companies can share best practices and discuss their unique approaches to challenges posed by the General Data Protection Regulation (GDPR) and the second Payment Services Directive (PSD2).

Collaboration and follow up

As a final note, the networking potential at FinovateFall was great. With a good mix of FIs, fintech startups, and investors, all with a similar focus on successful collaboration, conversations about how people can work together and next steps were happening almost constantly. Naturally, follow up is key for all involved. What comes from these talks will almost certainly have a significant impact on what we see at next year’s event.  

Login or register to make a comment on this blog post

Help Desk

Full list of offices


For more information and general enquiries, contact Frost & Sullivan near you.

North America
tel: +1.877.463.7678

Select a location near you..