For the last couple of days, the TruNarrative team have been meeting some of our FinTech colleagues at the LendIt Europe conference in London. We’ve had a brilliant time making new connections, catching up with a few more familiar faces and ensuring our proposition is on track with the demands of this market.
I have taken some time to share some of the key themes from the conference and discuss what we learnt from the wide range of speakers that we heard from.
One key theme is that FinTech’s are now at the end of the beginning in their journey as people start to see FinTech experience as the ‘norm’. The early FinTech companies are starting to evolve and mature and new entrants are looking to cutting edge technology to ensure they’re ahead of the game in a crowded market. There is a genuine belief now FinTechs have become the default and whilst it will be some time until the banks really get hurt, this is now seen as a clear and present danger for the larger corps.
As a result, the larger banks are taking more notice. We heard from a few of them during the conference; about their realisations that they also need to innovate, and put processes in place to allow them to do so. It was clear that these larger organisations have spent a lot of their time looking at regulation and focusing on the need to be compliant, whilst also recognising the need for a shift towards a more proactive, FinTech-style culture. There is an acceptance that the larger banks support FinTech innovation on the surface through various accelerator programmes (keep your friends close and your enemies closer perhaps!), recognising the fact that it pushes their organisations to explore these new technologies too. This said we are yet to see any real widespread adoption of these technologies and techniques from tier 1’s yet; it may just be a time issue but my suspicion is that it is more to do with a continued disconnect internally between digital modernisers and policy/governance processes at the back end which cant keep up.
We then heard how FinTechs are re-bundling. Early FinTechs mainly focused on one specific element of the 5 main banking product types but recognise the best way to scale is through new offering. Renauld Laplanche from Upgrade discussed how they’re now scaling and growing their product offerings to cover mainly lending and transactional, whilst predicting that re-bundling will continue to grow. As such, we have already seen a number of FinTech companies beginning their journey towards a full banking licence. I suspect over coming years we will then see more of these lenders decide they need to move into new territories and deliver on a cross border strategy.
I do wonder if this will all lead to a consolidation of the market through acquisition in the future – a very interesting space for all over coming years regardless.
We will see FinTechs scale into new products or territories in the near future, but with scale comes uncertainty and increased costs, especially in the regulatory and cultural demands to on-board customers in a simple but safe way. This is where TruNarrative can help – our unique app store and integrations ensure that scalability and reassurance. As Antony Jenkins told us at the conference, ‘verification is the foundation’ to the rest of the customer journey.
It has been a great few days and if you’d like to check out our demo which covers the issue of quick but safe scale: Lendit Europe please click here.