Next Bank Europe, the conference exploring startup-driven disruption in financial services, brought together diverse members of the European fintech ecosystem to discuss the collaborative transformation of the finance industry through innovation. The event was held on 18-19th September at Barcelona’s Valkiria Hub Space, in the city’s technological and innovation district. Next Bank Europe is an initiative of Finnovista, the impact organization accelerating fintech entrepreneurship.
Fermin Bueno, Managing Partner at Finnovista, said: “After two days of intense discussion from industry thought-leaders and entrepreneurs, the main message to emerge is that in order to keep pace with change, organisations need to be able to adapt quickly. We also saw how the emerging new technologies are being used to effect power shifts and challenge the status quo. Hopefully the attendees returned to their respective roles armed with some new challenges, ideas and tools. It remains to be seen what they do with them.”
Speakers addressed the changes the financial services industry is undergoing and speculated that ‘re-thinking’ the approach to innovation now, would ensure the greatest opportunities for the future of financial services. The first day focused on re-thinking the component parts of the industry – leadership, the organisation and the customer.
The main message to emerge is that in order to keep pace with the change, organizations need to be able to adapt quickly. The implication for leaders is that to make this happen the leader needs to be able to adapt as well. This requires a change in skills – according to Carina Szpilka, leaders need to be more facilitative, able to navigate, to self-correct, to win, to react and to empathize. As the organization becomes more networked and therefore adaptive so do the employees and in a sense, leadership becomes democratized. Leadership becomes everbody’s job. By having autonomy and being connected employees can facilitate change. In this new model, customer satisfaction and employee engagement are the metrics by which success is gaged.
Re-thinking the organization
It came through loud and clear that the new model has to be the networked organisation. An organisation that is networked is fast enough to cope with change. “Burn all the org charts” was the cry from Peter Hinssen. The old model of working by function must shift to collaborative efforts. The advantage that a startup has is that all employees do a bit of everything. It doesn’t have the luxury of having dedicated functions. The question was asked – who provides the best experience? The banks or the startups? The fact that these questions are being debated now shows that the answer is clear. The organisation also need to be more transparent. The new opportunities that are being exploited by startups have arisen out of this lack of transparency by the banks – take money transfers as an example. As Dominic Pym pointed out, banks have been hiding commissions and new entrants to the market have identified a gap which they have rushed into.
Re-thinking the customer
As Dominic Pym points out, it’s not about changing customer behaviour but recognising changes and responding. According to Lazaro Campos, banks are being disintermediated because they don’t own the customer experience anymore. So how can they re-think the customer? The answer, according to Marco Bressan, lies in the data. Data tells us what the population does, not what it intends to do. Marco argues that data is a bank’s most valuable asset and it exists in abudance. POS devices are the sensors and the resulting data should inform the decisions the banks make in relation to the customer. Embrace the data is the answer.
Fintech power shifts
The second day of the conference took a deeper dive into the new technologies that are driving these power shifts. A wide range of technologies were discussed – credit scoring, online and crowdlending, cryptocurrencies and protocols, on and offline experiences, APIs and cross-border payments.
APIs and identity came up over and and over. Dave Birch claims that APIs are where true innovation will come from – he calls it the ‘Amazonization of financial services’. Peter Vander Auwera suggested that if somebody can solve the problem of identity, financial tranasactions will change completely. Apple is getting close by owning the front stack. Speakers on the panel on cross-border payments said that they needed innovation in identity, not payments, to improve their business.
Europe’s fintech ecosystem
Ben Rooney cheekily asserted that there is no European ecosystem, there’s only London. This point was valiantly defended by the panelists with numerous reasons why Barcelona and Berlin were viable contenders. We heard that Holland FinTech are setting up an ecosystem in the Netherlands as investors told them that the London talent pool is too expensive and is drying up. Nektarios Liolios countered with a comment that’s hard to refute: the UK has a tax structure that encourages investment in startups – you can’t ignore that. He feels that fintech innovation is more likely to come out of Greece or Southeast Asia, where there is currently pain.
Winners of BBVA Open Talent
The conference ended with the announcement of the winners of BBVA Open Talent 2014, the global search for the world’s best startups with the most potential to impact their respective industries, organized with the support of Finnovista. There were 20 European finalists in two categories (10 in each) – New Banking and Digital Life. The finalists were given the chance to pitch to the Next Bank Europe audience which was made up of business executives, entrepreneurs and investors. The winners were chosen by a panel of expert judges and the vote from the audience.
ClauseMatch, a solution for matching and negotiating trade agreements, was named winner of the New Banking category and Counterest, provider of data analytics for the physical world, won the Digital Life category.