There were several key industry players in attendance this year in Amsterdam, with the highlight being Steve Wozniak, co-founder of Apple and Apple Fellow. Speaking on “The Future of Everything”, he shared his view on the evolution of society and the impact of technology on it, stressing social responsibility as an urgent priority: “Technology people often over estimate how quickly their new tech will be adopted, whilst underestimating the impact it will have on society,” he said.
Open Banking was arguably the biggest topic this year, although there was little that was truly new or exciting being said. Each European bank seems to be building their own solutions, incompatible with the next bank. Financial institutions in the United Kingdom talked about the Open Banking standard that they had to conform to, but even there implementational differences are causing a lot of complexity for payment service providers and account information service providers, especially around identity.
No regulations compel South African banks to open their customers’ account to trusted third parties as they do in Europe, but the industry is definitely making strides exploring the API economy. There’s a lot of potential here to draw the unbanked more fully into the financial system, leveraging low-cost, highly innovative fintech services.
Industry guru, Dave Birch, is always a fount of knowledge. His talk focused on the future of identity, again including its social impact. The key focus here was the discussion of 3DID, the three-domain model of digital identity.
Discussions around digital identity often circled back to state-driven identity schemes, a fairly popular concept in parts of Europe. These would certainly help improve remote onboarding and new account origination, a current pain point for the financial services and payments industries. Entersekt is working on integrating to national identity databases in a couple of countries.
Ones to watch
Some companies drew more attention than others. The Madrid-headquartered biometrics vendor Biocryptology made a splash, not least for having beamed in its global ambassador, Antonio Banderas, talking about identity theft and its impact on victims’ lives. (The actor is an investor in the company. Biocryptology echoed Steve Wozniak on social responsibility.) Its marketing positions it as a protector of consumers and champion for victims of fraud, sometimes even providing them with financial and legal assistance.
Fintech giant Finastra got a lot of people talking as it formally launched three major components of FusionFabric.cloud, a new open source platform as a service that could have a big impact on the banking platform market. Already, 60 fintechs have signed up to its early adopter program. The CEO of Microsoft, Satya Nadella, who never normally speaks on behalf of other organizations, announced that his company is collaborating with Finastra on the initiative, indicating Microsoft’s future direction: ecosystems focused on supporting developer communities in the delivery of new solutions to life challenges.
ForgeRock, an Entersekt partner, shared some great insights on its work with organisations like HSBC, the BBC, and AmSports. The latter operates in the Internet of Things space, meeting an apparent need for connected sports equipment.
Another interesting discussion centered on the value of real-time data insights. Josh James from Domo presented a view on how real-time analytics can help senior management understand their business and pro-actively manage its direction. This also had a machine learning element, with the consumption of large training sets of data.
Challenger banks, such as competing N26 and Revolut, are becoming significant players. The distinctive strategies they use to gain greater market share are worth studying. They foreground great user experiences and excellently designed services by “hacking” traditional rails and leveraging ecosystem partnerships. Neither of them wants you to worry about geographical limitations. You can do it all, anywhere. At least, that’s the promise. Both Banks are very well-funded and customer growth has been significant: they have 2 million and 1 million customers respectively. That isn’t bad for entrants going back only two or three years. In South Africa, new digital banks Discovery and Bank Zero aim to transform financial services in the same way.
Tencent, 31% owned by Naspers, is a backer of N26. It also created WeChat, which again drew a lot of attention with its mantra, “think differently, think bigger, think beyond the current boundaries”. WeChat launched in 2011 as an instant messaging service, but has transformed into a platform offering an enormous range of services. Its growth has been incredible. An example: “Hong Bao”, little red envelopes of cash traditionally sent by Chinese as a New Year’s gift, are now being sent over WeChat, increasing in number from 20 million in 2014 to 14.2 billion in 2017.