Impressions from Finovate Fall 2016
29 September 2016
A few weeks ago I attended Finovate Fall 2016 with a few different colleagues of mine in New York. For those who’ve never been, Finovate hosts three main events (New York, San Francisco, and London) where more than 70 fintech companies are able to present new concepts, services, or products in a rapid 7-minute format. Traditionally, the San Francisco event has catered to more of the pure start-ups, while the New York event gives larger, more established vendors the opportunity to show off their newest ideas, although typically there’s a bit of a mix between each.
As a temperature gauge for the industry, I don't think there’s a better event. The ideas generally reflect where the industry is at in its thinking, and what the major trends are for fintech. For example, 2-3 years ago the hot topic was PFM, big data, and mobile wallets. Last year, mobile onboarding, customer acquisition schemes, and AI were the most prevalent. Parsing through the hype and the reality is typically one of the more fun aspects of attending. This year I noticed a few things that caught my attention:
Chatbots, Natural Language Processing (NLP), and general communication solutions were common: Companies like TokBox, Personetics, Kore, and Clinc were some of the more compelling examples here. These solutions were prominent in 2015, but the biggest change was the maturity of their capabilities. Last year, what stood out to most attendees were the many demos that fell flat. A handful of presentations completely bombed on-stage, and even those that made it through the process were often shaky and the inputs looked too rigid. These technologies have advanced quite a bit in the last year, and the proposition for banks is becoming much more attractive.
PFM was hidden behind data analytics: PFM hasn't been a discussion topic in the industry for quite some time. The initial round of PFM deployments were troubled by poor execution and unmet expectations by financial institutions that piloted them. Many financial institutions we’ve spoken to become immediately sceptical of a vendor solution that even uses the term. Celent has been talking for some time about PFM merging with online banking and essentially becoming the landing page. What was traditional PFM (spending breakdowns, budgeting, savings goals, etc.) is now just digital banking. New methods of financial management demoed at Finovate, however, show PFM under disguise as platforms that leverage data analytics. MapD was one that stood out. Clean data has always been the holy grail for PFM, and it’s always been one of the biggest issues. More solutions focused on getting the data analytics right, creating financial value for the consumer, and cleverly disguising what should have been PFM from the beginning: insights unpinned by advanced analytics.
Not many payments products or solutions leveraging blockchain: Surprising to me were the lack of payments startups as well as any startup leveraging blockchain. My thinking is that many of the solutions around blockchain are still in their early days, and probably not ready for prime time. Also, while I know of a number of startups leveraging the technology, they are more bleeding edge, and may have been attracted to the spring Finovate, which focuses much more on early-stage fintech companies. The lack of payments schemes was also a surprise, but it could be that Apple Pay has taken some of the wind out of the sails of fintech companies trying to solve very similar issues. Mobile wallets and payment products typically require a lot of industry leverage to make work. You have to satisfy the merchants, the banks, and the consumers, and most have failed to reach sufficient scale. Many in the industry said it would have had to be a larger more established firm, and indeed the launch of Apple Pay confirmed that prediction.
Finovate continues to offer great insight into where the industry is at and where it’s heading. We’ll continue to attend these events and provide some more analysis. Feel free to comment on your perceptions, if any, from the event.