I had the opportunity to attend Finovate Startup in San Francisco earlier this week. It was a great event with a slew of fintech companies showcasing their wares to the captive audience. Each company was given 7 minutes to live demo their product - not an easy task. I'm very much a hands-on person so I appreciated this format. The demos were great and I got a pretty good feel for each firm's product.
The audience was a mix of vendors, press, analysts, financial institutions and VCs. I was surprised and disappointed to see how few banks were in attendance. Only 17% of the attendees were from financial institutions, and 40% of the FI attendees were from a single institution. Banks need to do more with regards to innovation and this event is a perfect place to learn more, and formulate thoughts and ideas. It's also a great opportunity to look for vendor solutions that will improve feature/function, customer experience and overall competitiveness. While many of the startups offer their solutions directly to consumers on the web, there are a good number of firms that would be quite happy to sell their product to a bank.
Some takeaways and trends from the show: PFM is where it's at. I was amazed at the number of PFM solutions that were showcased at Finovate. Vendors include, moneyStrands, Wesabe, Mint, Jwaala, and greensherpa. I am a big proponent of PFM (see the following blog entries ) and was happy to see the emphasis. However, the market cannot sustain this many vendors and some will have trouble staying alive. PFM is expanding beyond budgeting and tracking. A number of vendors (Mint, greensherpa, Rudder, and Simplifi) demonstrated solutions that provide a picture of a consumer's financial health/viability and financial planning. Grades/rankings are provided and customers can see where they need help and can plan for the future. BillShrink demonstrated an impressive solution that can help consumers save money on their wireless bills, gaz, and credit cards. Lending related solutions are gaining popularity.
Tight fisted banks are driving consumers to a variety of places and P2P lending companies are capitalizing on this. Vendors here include, Prosper (now reopened), Lending Club, People Capital, and Pertuity Direct. Other vendors showed off lending and credit related offerings. These include Know Before You Apply, Credit Karma, Home-Account, ZimpleMoney, and SmartHippo.
Payments offerings. A number of companies had payments solutions - SmartPay, HomeATM, Moneta , and Tempo Payments. Mobile Solutions. iPhone apps were the talk of the town (some live, some in development). Mobank demonstrated a neat e-commerce iPhone app. Not enough emphasis on security. Only 2 security vendors were part of the mix. Aradiom with a soft token for mobile phones and mobile banking, and Silver Tail Systems with their forensics solution. I was worried about the security of some of the solutions that I saw at Finovate. One vendor, Tempo Payments actually showed a form that contained a full SSN - not something you ever want to request or display online! The audience was given the opportunity to vote for best of show. BillShrink, Prosper, Silver Tail Systems and Simplifi were selected (in no particular order). Look for an upcoming Celent report authored by yours truly that examines the fintech space and what it means for banks.