- Business Insider Intelligence Senior Research Analyst Eleni Digalaki shared key takeaways from Money20/20 Europe.
- Financial Services Research Director Dan Van Dyke will moderate a panel discussion on Gen Z and financial inclusion at Money20/20 USA at the end of October.
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Business Insider Intelligence (BII):What were the key topics to come out of Money 20/20 Europe?
Eleni Digalaki (ED):There are a lot to choose from, but open banking stuck out. On the one hand, executives I spoke to were disappointed with the lack of progress since the launch of the PSD2 and Open Banking initiatives. On the other, people remained optimistic around open banking’s potential to transform the global financial services industry in the future.
Fraud prevention and cybersecurity were also major topics of discussion. With payments and commerce moving increasingly online and open banking-enabled ecosystems growing in prominence, I noted a rising demand for solutions that leverage AI and machine learning (ML) to outsmart fraudsters.
Digital identity was in the spotlight, too, as the industry’s move to omnichannel heightened the need for a universal and channel-agnostic authentication tool. From what I heard, delivering on this need might prove a tall order.
Last, I’d say the most attention was on partnerships — but that theme crosses into every topic I just mentioned and more.
BII: Did any previously covered topics fall off the radar this year?
ED:I’d say there were far fewer discussions about blockchain this year compared with Money 20/20 Europe 2018. The fact that most blockchain proof-of-concepts and pilots have failed to translate into industry-level deployments so far probably didn’t help.
It was interesting to hear Ashley Lannquist, project lead for blockchain and DLT at the World Economic Forum, note the collaboration for blockchain R&D as an imperative for companies that want to deploy high-value and scalable applications. R3 CEV and the Hyperledger Project are examples of two popular consortia. But I also think that sentiment around the tech will improve as specific use cases gain traction, with remittances being a good example.
BII: What were large, established payments firms’ biggest priorities coming into this year’s event? What about startups?
ED:The answer to this is, again, definitely partnerships,for both legacy players and fintechs.Amid intense competition, players in the industry are looking at offering a superior customer experience as a way to differentiate themselves. This entails redesigning the buying journey to offer secure, friction-free, real-time, and personalized services.
And partnerships can help payments firms deliver. Discussions focused on the strategies — think innovation hubs, accelerators, direct investments — and criteria for successful partnerships, but also on what each partner brings to the table. For legacy players, it’s consumer trust, resources, and superior know-how of regulatory compliance and data protection, while for startups it’s tech, talent, and agility.
BII: You also moderated a panel discussion at the conference. Who was on it, what was it about, and what were the key takeaways?
ED:My panel was called “Partnerships is the winning formula in tomorrow’s payment industry” and it kept with the tie-ups theme. The speakers, Charlotte Hogg, CEO of Visa Europe, and Bo Nilsson, CEO of Nets Group, talked about their work together in the space of real-time payments. Hogg touched upon the cultural transformation necessary for ensuring successful partnerships with external players, while Nilsson spoke about the considerable opportunities arising from the differences between local markets in Europe. What I took away from it, though, is that in today’s disruption-driven competitive environment, no player — no matter how big — can or should try to do everything alone.
BII: What was the most impactful thing you heard at this year’s Money 20/20 Europe?
ED:At a panel discussion on AI and blockchain, Cofounder and Managing Partner of Arbor Ventures Melissa Guzy said that, currently, around 99% of blockchain innovations bring no real value, and that while almost all companies say they’re transforming the industry by using AI, 90% of that is simply noise. Transforming financial services with AI is no small feat, and this discussion really brought the point home for me. On top of a well-defined strategy, stakeholder support, and resources, it requires a deep understanding of the tech, including its limitations; overhauling internal processes; tapping into the power of cross-business raw data; retraining employees; and working closely with regulators.
BII: What new trends have you seen since the show that you expect we’ll hear more about at Money 20/20 next year?
ED:I’ll put my money on Banking-as-a-Service (BaaS)! While relatively nascent among legacy players, I think many incumbents will turn to BaaS as a way to diversify their business models, generate new revenue streams, and turn some competitors into customers. Next year we’ll probably hear from innovative banks about what it takes, strategically and tactically, to make BaaS a success, including how to create a clear monetization strategy or accept that some existing businesses will face cannibalization — which I imagine might be a tough sell internally.
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