From "New banking generation" to the FinTech Hubs from accross Europe
On the first afternoon of ICT Spring, hundreds of international experts met at the European Convention Center Luxembourg to attend the second part of the Fintech Summit, which focused on the "New banking generation", the transformation of the payment industry and on European Fintech Opportunities.
New banking generation
Roxane Haas (Partner, Banking Leader, PwC) acted as the moderator of the "New banking generation" part and started by saying that new entrants and new concepts are redefining the banking industry. "Moreover, customer behavior is also changing and banks need to leverage on data and AI to understand these needs," she added. In this respect tech has become central and strategic, but are raising many questions.
Collaborating with FinTechs to stay relevant towards your customers
She invited Sanders Daniels (Senior Director & Financial Services EMEA, Salesforce) to take the stage. The expert advocated collaboration, which is to increase once open-banking hits the road, with more partners involved. After sharing a video retracing the digital journey of BBVA, Sanders Daniels explained that the 4th revolution was about having better connections with customers, in a context where the following trends are leading the way: Voice and AI bots, IoT, contextual dialogues, etc. "Today, convenience drives customer loyalty. Customer expectations have changed: 77% of all consumers say that the experience a company provides is as important as its products and services," he highlighted, before adding: "At Salesforce, we believe in convenience: we operate the infrastructure, provide security, etc. it's a fully hosted experience. We are the last mile to the customer". The solution actually provides banks with a backbone to unify their language, in a period of open-banking. According to the expert, brands – and banks – do not necessarily have to own the customer experience: a groundbreaking revolution to trust the partners to represent their brands. "Business models have changed: leading banks have switched from customer analytics from customer behavior, where proper open-banking services are crucial and collaboration is key," concluded Sanders Daniels who then shared the digital period table of Salesforce, dealing with data integration, customer insights and continuous innovation.
It's all about people not the technology
Then, the organizers welcomed Duena Blomstrom (Author, Keynote Speaker, Creator of Emotional BankingTM, Forbes Writer, Co-Founder & CEO PeopleNotTech). "We can agree on one thing: we can't be like the big guys in the Silicon Valley. Today, many banks still have small discussion in their board rooms, even if disruption is coming. They know they have challenges. What do they need? People, not tech!" she highlighted. Duena Blomstrom added: "The three main components are knowledge, courage and passion. These allow companies to perform. But financial services generally do not rank very well in wellbeing surveys…". After several years working for a management consulting firm, she focused on organizational change and notably on the concept of psychological safety. Her solution uses AI to build team that will perform, after answering to around 200 questions: "team members need to trust each other".
Leveraging on Fintechs to become the go-to platform
The next guest speaker, Benoit Legrand (CEO, ING Ventures & Chief Innovation Officer, ING), shared his experience in partnering with Fintechs. According to him, the challenge of innovation is to lead the organization to the unknown while delivering on the short term. Benoit Legrand then explained ING's 3C strategy, which focuses on Customers, Culture and Connection, aiming at delivering impactful value rather than gadgets. "There is still a big danger in the innovation process: panicking and stopping things. Patience is crucial and so is keeping in mind that what you do is for the customer, and only the customer. Everything you do needs to be relevant form him/her," he explained. The expert also highlighted that it is essential to set clear goals, with the support of top management and decision-makers. Benoit Legrand then shared the process used to turn ING into a platform, built on the verge of the organization and allowing the development of other business models. Benoit Legrand then insisted on the necessity to be pragmatic and to solve customers' problems, by developing your own solution, investing, partnering or acquiring, depending on where financial institutions want to go. He concluded: "the main challenge of the digital revolution is actually not digital: it's both human and cultural. A lot of work and of training are needed, and mistakes will happen. Be patient… but start running!"
Collaboration between banks and FinTechs: Experts views
Jonathan Prince (Co-founder, Finologee) then moderated a round table featuring Benoit Legrand, Duena Blomstrom, Corentin Dubucq (Marketing & Strategy Director, BGL BNP Paribas) and David Marongiu (Chief Operating Officer, CA Indosuez Wealth (Europe)). "Start with humility, first explained Benoit Legrand, and be aware of the fact that you don't know the future. Then, ask yourself "what can make my life better", take a step back and act". The ING expert also explained that taking risks was the key, which cannot be done in traditional banks: it's all about creating new environments, where there's no limit. "The game is open to anyone!" David Marongiu admitted that the digital revolution has not completely happened in Private Banking, but added that change will be driven by generational change. "Clients are more demanding about tools and regulation adds external pressure. Yet, it is pushing us to open-up and accelerate the process," he said. According to Corentin Dubucq, there's no other way to succeed than partnering with Fintechs, but most people are still afraid to speak their minds: banks can therefore be stuck in their traditional processes. "The creation of structures to handle innovation and bring new solutions to the clients has a cost, but it is necessary to invest in the future," he highlighted. Then, Duena Blomstrom, added: "I don't see banks buying innovation to become better and change the way their work. I only see them buying pieces and not focusing enough on fundamentals". Corentin Dubucq reacted: "It's changing, but it takes time for a traditional industry to transform itself".
How to define the bank of the future?
Fireside Chat was then organized, with the participation of Toshihiko Otsuka (CEO, Rakuten Europe Bank & Rakuten Europe) and Ghela Boskovich (Head of Fintech & Regtech Partnerships, Rainmaking Innovation & Advisory Board Member, Merchant Payments Ecosystem). The CEO of Rakuten Europe Bank first went over the history of the Japanese e-commerce turned bank, with the transformation of business models and the creation of an entire ecosystem of financial services: "we acquired insurance companies, fintechs, messaging apps, etc. it's what's best for our customers as we provide them with a unique customer experience. And not only when it comes to financial products and services, but in their entire daily life. Our services are customer-centric".
The organizers then had the pleasure of welcoming Bob Moritz(Global Chairman, PwC) who started his presentation by sharing figures on the impact of new tech: 66% of CEOs surveyed think that AI will have a bigger impact that the internet itself…yet, less than 10% have done something about it. "85% of them believe AI and tech will have a positive impact on society, but on the other hand, CEOs struggle to achieve their strategic objectives because they don't have the right talent and change agents to go from A to Z," he added. According to him, every sign of innovation, no matter where it comes from, has to be thought about from a customer experience perspective: the cost value equation will go down and value will rise. Bob Moritz than explained how scalability was important: many organizations and countries come up with great innovation and use of tech, but they are not able to scale. "All stakeholders need to be involved in innovation projects, they will appreciate and understand the value it could bring. Also, digital skills are key; education systems are ill equipped to provide the right skills, and businesses are not using enough lifelong learning processes. Together, they all need to invest more time and integrity to reskill the workforce," highlighted Bob Moritz. The CEO of PwC then explained that within his company, the sharing of knowledge drives things forward, favoring citizen-lead innovation. According to him, top-down push and approaches cannot survive on the long term. He concluded: "Let's empower the organization to change the way they work, notably by fulfilling the concept of skillset enhancement. Apply citizen-lead innovation and then scale".
The second part of the session, focusing on the transformation of the payment industry, started with a fireside chat between Douglas Feagin (President of International Business, Ant Financial Services Group) and Chris Skinner (Author, Speaker and Troublemaker). The experts first went over the origins of Ant Financial/Alipay, which started as a mechanism of trust in China, between consumers and digital merchants and then transformed years later to become a mobile payment platform. "Mobile payments are ubiquitous. They are everywhere, from small street merchants to big players. We have an ecosystem approach which allows to connect all sources of funds, borrow money, get credit, etc," underlined Douglas Feagin. They then discussed financial inclusion, allowing small businesses to develop, and then explained that Ant Financial is extending its services for Chinese tourists travelling around the world. "We are more of a tech company and are not competing with traditional banks. We are providing the full stack of finance to people who didn't have access to it in the past," concluded Douglas Feagin.
Another fireside chat brought together Jan-Willem Roest (General Manager Benelux & Ireland, Paypal) and Pascal Bouvier (Finech Venture Capital Investor). They started their conversation by highlighted the fact that Paypal was 20 years old and that it started with a p2p payment solution, which then adapted to commerce and later to mobile. "Trust is the most important aspect in our industry. There is no winner-takes-all, we believe in partnerships and have concluded over 40 strategic partnerships in the last 2 years, 20 being with financial institutions. We are also partnering with Facebook: they have some of the most engaged users, and on the other side we deliver trust," also added Jan-Willem Roest, who concluded by stating that Paypal believes that the customer experience should be at the center.
Innovation imposes collaboration
Jacques Pütz (CEO, LUXHUB) took the stage to present his LUXHUB concept: "times are challenging and things move at a fast pace. Agility is the keyword. And so is collaboration. How to innovate and keep the pace with regulatory changes? It requires many IT developments and getting rid of legacy systems. Banks clearly need to reinvent themselves". According to him, PSD2 is just the first step of open-banking. How is collaboration working so far? Fintechs are not keen on working with only one financial entity, while banks are often still thinking in silos. Therefore, collaboration takes time. LUXHUB aims at facilitating collaboration and at connecting financial entities and Fintechs via its marketplace, and therefore participate in the new banking world. "The new environment imposes change management. Fintechs can publish their services in a highly secure marketplace while banks can do a POC in their own environment. My personal opinion? We all need to participate in open-banking, by sharing the knowledge with Fintechs," concluded Jacques Pütz.
KYT, an essential game-changer for payments
Frank Roessig (FinTech Lead, Proximus) moderated a round table on KYT – Know your Transaction – which brought together Jacques Pütz, Michael Pechner (COO, Payconiq International/ CEO, Digicash), Tobias Seidl (Co-founder, STOCKR) and Nadia Manzari (Partner, SCHILTZ & SCHILTZ). "Metadatas are now attached to payments, analyzing the context by using AI and ML means developing the KYT concept," started the moderator. According to Nadia Manzari, companies need to protect their business, and therefore their clients, by creating trust: "checking unusual transactions and behaviors are essential elements for AML". Michael Pechner, explained that KYT was the natural evolution from KYC, by analyzing transactions to add an additional layer of trust and security. "The transaction map is much more complex now and KYT is a must. It will help reduce false positives and reduce the friction," he added. Jacques Pütz underlined to need to mutualize efforts: "all the players need to do the same thing. Why not create a huge data lake and create solutions on top of it, for instance, adding AI to find the fraud. We will get better together". On the other hand, Tobias Seidl explained that tokens could add a layer of transparency, allowing the history of transactions, and enhancing the customer experience.
The Great European Fintech Opportunity: Discover the best Fintech hubs across Europe
The last session of the day was entitled "The Great European Fintech Opportunity" and was moderated by Manon Loison (Head of Marketing, LHoFT) and Alex Panican (Head of Partnerships and Ecosystem Development, LHoFT). They first welcomed Mads Tingsgràd (Head of Fintech Intelligence, Copenhagen Fintech) who presented his accelerator: it was created in 2016 and has more than 200 partners, sponsors and members taking part in its ecosystem. Its purpose? Accelerate the growth in Fintech jobs, investments and companies, but also building and branding a thriving Fintech Hub. "Our Fintech Lab is the first and biggest Nordic dedicated Fintech co-working space. More than 55% of the startups have received funding the last year and 70% collaborate with incumbents," added Mads Tingsgràd.
Adina Grigoriu (CEO & Co-founder, Active Asset Allocation, Lady of FinTech 2017) and Vincent Lapadu Hargues (Responsible for asset management and R&D follow up, FINANCE INNOVATION) then took the stage to present the French Fintech scene. The latter presented his French cluster for finance which was created 12 years ago in order to support the growth of startups within the financial industry. Adina Grigoriu's company joined this program 7 years ago. Active Asset Allocation is a fully independent financial engineering company (FinSurTech), specialized in the management of portfolio risks and the optimization of investment strategies for institutional investor and asset managers all around the world.
The "Italy: The payment gateway" session was presented by Antonio La Mura (Business development Manager, Fintech District). He presented his hub, which organized events focusing on education and workshops, but also holds pitch sessions and welcomes international delegations. He added: "Fintech District is an open ecosystem that seeds, fosters and drives innovation within the Italian fintech community, serving as its flagship brand in Italy and abroad". He shared the microphone with Samuele Pinta (Founder & COO, Satispay) who presented his app which allows in-store payments, p2p payments, in-app purchase and much more. "Satispay is a platform built to become the leading payment and financial service provider. The app gives a unique user experience and has become the leading mobile payment app in Italy", concluded Samuele Pinta.
"Innsomnia is an Open Innovation Hub specialized in accelerating startups through agreements with corporates that want to digitize their businesses in the areas of fintech, insurtech, industry 4.0, agrotech and naval-logistic-port," then explained Francesc Pons, Project Director, Innsomnia, presenting the vibrant Spanish Fintech scene. The hub advocates collaboration and co-creation and has more than 500 startups participating in its ecosystem. Finally, he presented the Logic Value chatbot.
The LHoFT session ended with Demet Zubeyiroglu (Co-Founder, KOOPHub) and a presentation entitled "Turkey: The Fintech bridge". She started by describing the current Turkish financial scene, its Fintech landscape and the work done by KOOPHub: "KOOPHub is a diverse and independent community enabler with high value-added services for startups, scale-ups, financial institutions, corporates, merchants, operators and others. It offers a wide array of deliverables in 3 main pillars: knowledge exchange, lab and platforms".
Photos: Marion Dessard