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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Much of our behind-the-scenes work at Finovate is determining what’s hot and what’s not in fintech and banking. But given the ever-evolving regulatory landscape, volatile consumer preferences, and fast-changing enabling technologies, it can be hard to keep up on current trends.
And while we like to consider ourselves experts on the fintech landscape, it is always important to consult external thought leaders to gauge their thoughts on industry themes. That’s exactly what we’ve done in our recent Hot or Cold Video Series. We talked with eight experts to glean their insights on a range of current industry trends. Check out the videos below to delve into topics such as embedded finance, BNPL, regtech, automation, decentralized finance, generative AI, the metaverse, and open banking.
Jonathan Alloy, VP Design Thinking at Credit Suisse
Barry D’Souza, VP Digital Strategy at Inerra Credit Union
CJ Conrad, SVP Innovation & Operations at Middlesex Federal
Eric Sorensen, Director Digital Services
Catherine Porter, Chief Business Officer at Tillia
Rachel Muench, Security and Biometrics Lead at Nuance
Tomas Chamorro-Premuzic, Author of I, Human: AI, Automation, and the Quest to Reclaim What Makes Us Unique
Luke Williams, Professor of Innovation at NYU’s Stern School of Business
Tomorrow marks the final month of 2023. And while it is a good time for organizations to reflect on their progress from the past year, it is also an opportunity to plan for success in 2024.
To jump start some new ideas for 2024, check out our conversations with industry experts. Earlier this year, we gathered a range of insights from thought leaders in attendance at FinovateFall in New York. Among the topics we discussed were:
Using AI to create better customer experiences
AI in authentication
How can banks and fintechs work together better?
Top industry trends
How can fintechs face new challenges in today’s economic environment?
With FinovateFall in the books, and FinovateEurope right around the corner, our Streamly Video Series is a great way to keep the conversation going between conferences!
This week, we feature three interviews from some of FinovateFall’s keynote speakers: Jacqueline Baker, Principal Consultant and Founder of Scarlet; and authors Tomas Chamorro-Premuzic; and Tommaso Di Bartolo, experts on AI and the multiverse, respectively.
Jacqueline Baker: How to Empower the Leader Within You
Tomas Chamorro-Premuzic: The Human-AI Relationship of the Future
Tommaso Di Bartolo: Living La Vida Metaverse – Are You Ready to Be Immersed?
With more than 100 new loans in Q2 and over a billion dollars in new loan commitments, Silicon Valley Bank (SVB) is “doing the same thing we’ve been doing for over 40 years,” according to SVB’s Head of National Fintech and Specialty Finance Nick Christian. Now a division of First Citizens Bank, Silicon Valley Bank has been a key component of the innovation economy since 1983, providing critical financial services to Bay Area technology entrepreneurs and their companies.
Nick sat down with Finovate Vice President and host of the Finovate Podcast Greg Palmer earlier this month in the wake of SVB’s recently released Future of Fintech report. The report looks at the outlook for innovation in the fintech sector based on SVB’s unique sector knowledge and proprietary data. How are cash reserves holding up for fintechs? Which direction are valuations going? What can we expect from funding growth heading into 2024? Nick and Greg discussed these issues and more including:
The resilience of early-stage companies in the face of the funding slowdown
The importance of becoming cash-flow positive
How embedded finance is revolutionizing payments and putting new emphasis on monitoring and compliance
The life insurance industry is anything but static. Technology has changed what is possible, consumer expectations have evolved, and financial habits have changed. One thing that hasn’t changed, however, is that people don’t like thinking about their own mortality.
Wysh is tackling these challenges with its embedded insurance product, a high-yield savings account that currently pays 4% APY and includes an additional life insurance payout of up to $10,000. I spoke with Wysh Founder Alex Matjanec at FinovateFall last month on his Best of Show-winning demo at the show, how Wysh works for customers in today’s interest rate environment, and how he views the future of the insurance industry. Check out our conversation below.
Artificial intelligence has taken the technology world by storm – and fintech is no exception. But questions remain as to how AI can be best applied in the world of fintech and financial services.
I talked with Anu Sachdeva, Global Service Line & Solutions Leader at Genpact, during the FinovateFall conference last month to discuss the role of generative AI in particular in financial services. Among the topics covered were:
How banks can realize the true value of generative AI.
What use cases banks and other financial services organizations have found for generative AI.
What are the most important considerations for financial services organizations when adopting generative AI.
Are regulators in financial services doing an effective job of protecting consumers while simultaneously fostering innovation? How can regtechs help banks better manage financial risk? Can a robust regulatory regime actually enhance the prospects for business growth?
I sat down with Shabbir M. Husain, Director of Global Sanctions Compliance at Silicon Valley Bank, to discuss these and other issues, including:
How banks can keep pace with new competition
The importance of effective risk assessment
How to foster a “culture of compliance” within an organization
Last month’s launch of FedNow has sparked discussions on the future of real-time payments and their implications on banks and fintechs. In an interview with ConnexPay Founder and CEO Bob Kaufman, we look at the introduction of FedNow and how it stands to impact competition and adoption across the sector.
The interview also sheds light on the shift away from checks and cash, looks at the impact real-time payments will have on banks, and offers insight into strategies to stay ahead of the curve.
How will FedNow’s recent launch impact competition and adoption across the sector?
Bob Kaufman: In my view, FedNow effectively bridges the gap that exists between the traditional ACH infrastructure and the Federal Reserve’s payment rails. While ACH offers a reliable solution for high volumes of payments, its drawback lies in its lack of real-time processing. Even with the introduction of same-day ACH, there remains a risk of funds being reclaimed within a short span. This limitation becomes evident in situations such as property purchases where swift transactions are crucial – a circumstance for which the wire network was established. However, the wire payment system comes with its own set of drawbacks, notably its high cost and the manual intervention required.
What are the current barriers to mass adoption of real-time payments?
Kaufman: FedNow targets small-dollar peer-to-peer transactions and operates solely within the United States. In contrast to card-based transactions, there also appears to be a lack of a robust dispute resolution process for FedNow, although there have been discussions about implementing one. When we consider the present use of credit cards, it’s interesting to note the confidence we place in the act of handing our cards to unfamiliar entities. This applies particularly to transactions involving businesses we’ve never engaged with before. We readily input those 16-digit card numbers without dwelling on the potential consequences if the purchased items fail to materialize at our doorstep. This level of assurance stems from the knowledge that, should an issue arise, we can promptly contact our bank, initiate a dispute, and subsequently reclaim our funds. This chargeback process is a fundamental reason why credit cards remain a prevailing payment method.
The dominance of Visa and Mastercard in the market is largely attributed to their establishment of a highly effective chargeback mechanism. This tried-and-true approach provides a reliable means of resolving transactional disputes that isn’t as well-developed within alternative payment avenues.
What impact will real-time payments have on banks?
Kaufman: I believe that the banking sector stands to benefit from addressing the current shortcomings within the ACH and wire transfer systems. While ACH transactions work seamlessly for many B2B payments due to their scalability, they each have limitations when it comes to P2P and certain other transaction types. ACH will undoubtedly continue to serve a purpose for pre-authorized payments, enabling businesses to initiate ACH transfers to designated recipients when there’s an assurance of incoming funds.
However, ACH encounters challenges, especially in terms of data handling. In contrast, credit card transactions provide an array of comprehensive details, including Level 3 data, allowing for precise identification of invoices and the nature of the payment. This wealth of information ensures clarity in understanding the purpose of a transaction. The reconciliation process poses a significant issue with ACH transactions, particularly for the CFOs of large corporations. Their checking accounts could be inundated with hundreds of ACH records on a daily basis, often without clear indications of their corresponding purposes. This discrepancy creates a reconciliation nightmare that doesn’t arise when utilizing credit card transactions, where the associated data provides a more transparent overview of each transaction.
Will the real-time payments boom in the U.S. lead to the end of checks and cash payments?
Kaufman: Throughout my tenure in this industry, the consensus has been that checks are steadily fading into obsolescence. Admittedly, it’s been quite some time since I’ve personally written a check, and even my 20-year-old children are unfamiliar with the concept. In that regard, checks have essentially become a thing of the past.
While checks are dwindling, they persist in B2B payments, constituting nearly half of such transactions. COVID-19 impacted cash usage, yet it remains for businesses lacking stable internet connectivity. The complications of cash management and the IRS’s stance on it provide incentives to phase it out.
At ConnexPay, our objective is to serve as a comprehensive solution for inbound and outbound funds for companies that operate as intermediaries (such as travel agencies, Doordash, Uber Eats, and ecommerce marketplaces), rather than producing their own goods or services. We’re committed to addressing the diverse payment requirements that these businesses demand. This is precisely why we offer options like push-to-card, ACH, and wire transfers.
What is ConnexPay doing to stay ahead of the trends in the industry?
Kaufman: ConnexPay was established with a vision to address the fragmentation in the payments industry. Our goal is to streamline the payment process for companies by offering both incoming and outgoing payment solutions. Unlike our competitors, we provide a unified approach, resolving pain points like cash flow issues. Our real-time access to funds sets us apart.
We are agile in responding to customer needs and rapidly implementing new solutions. For instance, consider companies like AirBnB – although they are not yet our clients, such firms have expressed a need to compensate consumers rather than businesses on the opposite end of a transaction. These companies prefer not to rely on credit cards; instead, they appreciate the benefits of real-time access and the potential data insights associated with such transactions. To address this requirement, we recently introduced Push-to-Card Payouts. A similar scenario could arise with FedNow. However, it’s worth noting that we currently serve 250 clients, and none of them have indicated a desire for ConnexPay to provide this particular offering.
In the dynamic realm of financial advisory, the voice of experience is vital in understanding the present landscape. We recently spoke with intelliflo Vice President of Customer Management Lisa Jacobs on the challenges, opportunities, and trends in the advisory space.
Jacobs brings her 15+ years of experience to our conversation that sheds light on how firms can overcome labor shortages, resource constraints, constantly changing technology, and volatile regulations in the financial advice space. She also addresses how advisors can balance and manage the ongoing high-tech vs. high-touch approach.
What are some of the top challenges and opportunities currently facing the financial advisory space?
Lisa Jacobs: We recently surveyed over 400 financial advisors and found that 80% of them believe more people are seeking advice and can’t find or access that help. This is both an enormous challenge and opportunity. Even though more people are seeking professional guidance, advisors across the board are stretched thin, making it nearly impossible to take on new clients without additional support. This prohibits advisors from growing their revenue and supporting more people, leaving many without the help they need. intelliflo was formed to bridge the advice gap; we’re committed to providing the tools and solutions to help advisors widen access to financial advice.
How can technology be leveraged to overcome these challenges and support financial advisors?
Jacobs: Modern technology has the power to help advisors address these resource restraints. In just about every industry, technology yields efficiencies, but the best tech also increases your customer’s satisfaction, too. In our industry, this is becoming known as a hybrid advice strategy – a flexible model in which clients in earlier stages of the financial advice journey are primarily served via digital channels and tools, and technology adds more to the customer experience for top clients with better outcomes.
To effectively embrace more digital tools, advisors are increasingly moving away from stand-along software tools that can’t integrate with other parts of their tech stack to avoid having to learn and log on to multiple systems. Many are seeking an all-in-one advisor experience to increase efficiencies and, in turn, provide a more unified client experience. If approached the right way, technology has the power to enable advisors to accomplish more with existing resources while simultaneously strengthening client relationships.
What advice do you have for financial advisors that are evaluating the many different technology providers out there?
Jacobs: Technology can only be effective if it is easy to use and manage. Otherwise, it might act as more of a hindrance than a benefit. That same survey of advisors underpinned this idea, revealing that the top three biggest barriers to adopting new technology for advisors are integration challenges (57%), time to install (41%), and employee time and resources to manage the technology (38%).
When vetting the many providers and solutions available in the market, advisors should consider these common areas of friction, prioritizing technology that is open and easily integrated, is flexible (which often means cloud-based), and has proven, responsive service and support teams.
Changing regulation seems to be a pressing topic this year for the fintech industry at large. What is the best way for wealth management companies to stay ahead?
A strong way to stay on top of changing regulations and compliance mandates is to collaborate with resources such as peer groups, associations, and technology partners to discuss these issues and what needs to be altered in response. We also increasingly see firms rely on partnership models with third party vendors, looking to outsource key functions and support such as compliance. However, advisors must be sure their partners are thoroughly vetted and monitored on an ongoing basis; not all partners are created equal.
What are the top trends in the advisory space to watch for the second half of the year?
Jacobs: In addition to the continued rise of the hybrid advice model, the evolving role of the advisor is an important trend to watch. A wider skill set is increasingly expected from advisors, including the ability to provide comprehensive guidance around critical life events and situations that fall outside of the traditional financial advisory relationship. For instance, clients are more frequently asking which insurance plans and options are best for their unique scenarios. And as their parents age, Millennials are seeking guidance from advisors on long-term care and arrangement options. These conversations can be emotionally charged, and empathy will become a key trait for the modern advisor. This is another reason why advisors must determine how to strategically leverage technology to make time for higher-value conversations and plans.
FinovateFall 2023 is one month away! Our annual autumn fintech showcase returns to New York City, September 11 through September 13, for three days of live fintech demos, insightful mainstage speakers, and hours of high-quality, professional networking. Book your ticket now and take advantage of big, early-bird savings.
To whet your appetite for our upcoming event, here’s a look at the keynote speakers who will address attendees on Day One of FinovateFall this year.
Devendra Kumar Sharma, President & Chief Operating Officer, Kore.ai
Sharma leads go-to-market functions, revenue growth, client success, strategy, and cross-functional collaboration as Kore.ai President and Chief Operating Officer. At FinovateFall, he will lead a Mastermind Keynote titled “How Generative and Conversational AI is Transforming Everyday Banking.”
Tomas Chamorro-Premuzic, Author, I, Human: AI, Automation, and the Quest to Reclaim What Makes Us Unique
Chamorro-Premuzic will lead an Out of the Box Keynote address titled “ChatGPT, Generative AI & the Future for Humanity.” An international authority in people analytics, talent management, leadership development, and the Human-AI interface, he is the Chief Innovation Officer at Manpower Group.
Jody Bhagat, President of Americas, Personetics and Daniel Caplan, Director, Digital Money Management and Wealth Services, BMO Financial Group
Bhagat and Caplan will team up to deliver a Mastermind Keynote titled “Winning the Battle for Deposits.” Bhagat has deep operating experience in financial services, including managing direct channels, launching digital ventures, and leading digital transformation programs. Caplan is an experienced and agile product manager and strategist who builds winning products, experiences and strategies that deliver tangible business results.
David Porter, Managing Director, Genesys Financial Services and Sachin Tandon, Worldwide Banking Industry Strategist, AWS
Porter leads the Genesys Financial Services vertical team, having spent many years in wealth management, payments, and consumer banking at J.P. Morgan Chase. Tandon has more than 20 years of experience in financial services and consulting leadership roles at J.P. Morgan Chase, EY, Fidelity, and Accenture. Together, Porter and Tandon will provide a Mastermind Keynote titled “The Future of Customer and Employee Experience in Financial Services.”
Justin Kamerman, Chief Product Officer, and Sunil Madhu, founder and CEO, of Instnt
Kamerman has more than 20 years experience designing and building high performance distributed systems in the telecom, IPTV, identity verification, social media analytics, and IIOT industries. Founder and previously CEO and CTO of Socure, Madhu has more than 30 years of experience innovating in the identity and access management, security, governance, and risk and compliance markets. Kamerman and Madhu will team up to deliver a Mastermind Keynote titled “Zero Fraud Loss + Zero Marketing Spend = 50% More Growth.”
Trends in fintech move fast, and one way to stay ahead of each new advancement is to follow the minds of thought leaders in the space. That’s why, for FinovateFall 2023, we’ve gathered an insightful group of speakers to take the stage during the event, which takes place on September 11 through 13 in New York. Be sure to register soon; FinovateFall is typically our largest event.
The diverse group of speakers will offer presentations on a wide range of industry topics, including payments, decentralized finance, lending, open banking, AI, and more. FinovateFall will host almost 130 speakers. And because it’s difficult to feature them all in a single post, we’ve distilled the list to highlight a handful of fintech celebrities that will grace the stage.
Alexa Von Tobel, Co-Founder & Managing Partner at Inspired Capital
Alexa Von Tobel is the co-founder and managing partner of Inspired Capital. Prior to Inspired Capital, Alexa founded LearnVest in 2008 with the goal of helping people make progress on their money.
Matt Harris, Partner at Bain Capital Ventures
Matt Harris is a Partner at Bain Capital Ventures in New York City and focuses on investments in financial technology. He sees a huge amount of revenue, profit, and market cap shifting from regulated financial institutions to entrepreneur-led insurgents, across payments, lending, capital markets, real estate and insurance.
Jacqueline Baker, Author of The Unexpected Leader
Jacqueline M. Baker is a speaker, author, leadership consultant and advisor known for her unique approach to modern etiquette and leadership. As the author of The Unexpected Leader: Discovering the Leader Within You and Leader by Mistake: Becoming A Leader One Mistake At A Time, she frequently speaks and writes on the leadership-for-all concept.
Sam Kilmer, Managing Director at Cornerstone Advisors
Sam Kilmer leads Cornerstone Advisors’ fintech advisory practice working with industry providers, fintechs, and investors. He also leads select strategy engagements with banks and credit unions.
Jill Castilla, President & CEO at Citizens Bank of Edmond
As President & CEO of Citizens Bank of Edmond, a one-location $350 million community bank in suburban Oklahoma City, and Chairman of Citizens Bancshares, Inc., Jill Castilla is a nationally recognized innovator in banking and financial technology.
