This week Copenhagen was the center of attention for anyone interested in fintech and the future of finance asfor the first Money 20/20 was held for the first time in Europe. More than 3000 participants gathered for four days of fintech. I will try to give a brief summary of my key takeaways from the event.
At the opening statement the event organizers commented that they started seeing a lot more suits than jeans and hoodies at fintech events. This remark illustrates that fintech is no longer reserved for entrepreneurs and VCs, but is now at the top of the agenda for bankers everywhere.
Celine Lazorthes from Leetchi/Mangopay shared her experience e of approaching traditional bankers as a young female entrepreneur. When she first approached incumbents with her startup their response was to offer her an internship rather than discussing a partnership, proving the cultural resistance to change within the banking industry. Or as Greg Midtbo of Moven stated it: “Banks aren’t broken, but traditional banking is”. This is the reason several banks participated at the panel, sharing our collective experiences of different partnership model. Concluding that there is no one size fits all recipe for bank and fintech collaboration.
When fintech was in its early days both entreprenurs and investors were set to eat the banks lunch. While on the other hand incumbents dismissed fintech as a threath and stated that the banks would eat the fintechs for lunch. But at some point both bankers and fintechs realized that it would be a lot more beneficial for everyone to eat lunch together.
Valuations are getting a reality check as fintech moves to the next level of the hype cycle. It is no longer sufficient with a vision to revolutionize payments and banking, but you need an execution plan of how you should fit in to the ecosystem as well as proven non-vanity metrics to get the investors attention.
Alipay announce their move into Europe by immodestly announcing that their goal is world domination. Expect the payment space to become even more competitive as Amazon, Apple, Alipay, Paypal, Google and Facebook are all targeting the same consumers.
Payments is in other words an area you should stay away from if you are contemplaiting becoming a fintech entrepreneur in the future. As the competition increase, consumer payments will become a commodity and no more than a tool for customer acquisition for banks, converging industries and big tech. On the other hand there are still revenue potential at the B2B side of payments, both in the SME segment and corporate banking.
Challenger banks, escpecially Mondo recieved a lot of attention as they showcased how great user experience, personalization and customer centricity should be perceived as more than digital lipstick for retail banking.
Blockchain was once again center of attention as Blythe Masters took the main stage, predicting that the financial sector will start using blockchain in less than two years. However mainstream adoption will still take many years from now. On the panel track regarding regulatory perspectives on blockchain and cryptocurrencies it is stated that the need for a common global standard is required for mainstream adoption.
As the event were in Copenhagen, it was a great opportunity for the Nordics to showcase a wide selection of fintech startups. Ranging from Klarna at the center stage to startup presentations and showcases at the exhibition hall.