The Financial Services Roundtable’s first-ever FinTech Ideas Festival hit the sweet spot when it comes to events because it addressed both sides of the FinTech equation: The technologies being developed by financial firms that will change the way firms interact with consumers AND the way the “Fin” part of FinTech must respond to what the “Tech” part is doing on its own. Stay with me …
When most consumers think of FinTech, they think of things like being able to deposit checks via their phone or waving their phone at the Starbucks register to pay for their latte. But the other critical aspect of FinTech is how financial services firms adapt to changing consumer needs that are being thrust upon the industry by technological advances from companies that have little – or nothing - to do with finance. For example, financial services companies didn’t develop the platforms companies like Lyft use to conduct their business, but insurance companies still had to respond and devise policies to help those entities prosper.
FIF 2017 took place last week at the Bently Reserve building, which used to house the Federal Reserve Bank of San Francisco, and offered an intimate setting for C-level execs and other renowned visionaries to exchange ideas.
There was loads of great insight shared at FIF and here are just a few of my personal highlights:
- Visa’s NFC-enabled payments rings are awesome: Attendees at the FinTech Ideas Festival got a taste of the devices Team USA Olympians test drove in Rio and they were a hit. As media, I didn’t get my hands (or should I say finger?) on one, but the overwhelming consensus among attendees was that Ryan McInerney and the Visa team have a winner on their hands (or fingers…).
- Autonomous Cars – Part 1: Lyft co-founder and CEO John Zimmer dropped a few bold predictions on the crowd when he said he expects half of Lyft rides in 5 years to be completed by autonomous cars. Zimmer added that it is not out of the realm of possibility that cars with drivers might one day be banned in some big cities. To back up his predictions, Zimmer explained, “If I would have sat in this room 5 years ago and told everyone that one day people would ride around in cars with complete strangers – and that those cars would have pink moustaches on them - you would have thought I was insane.” Good point.
- Autonomous Cars – Part 2: Autonomous cars stand to be a major disruptor to certain sectors of the financial services sector. Lyft’s Zimmer predicts individual will eschew owning their own car and instead have their transportation needs met by companies like Lyft operating fleets of cars. These fleet companies will offer consumers membership plans similar to mobile phone plans of today. The auto lending and auto insurance sectors of financial services will need to adapt to what could be a dramatic shift in consumer demand.
- Autonomous Cars – Part 3: It is not just the financial services sectors associated with cars that need to prepare for the ramifications of autonomous cars. According to State Farm CEO Michael Tipsord, approximately 90% of all car accidents are attributed, at least in part, to driver error. If autonomous cars reach a point of reliability where they become the norm, the number of car accidents will be reduced dramatically. What kind of impact will that have on demand for hospital beds, emergency room equipment and other health care services? Financial services firms active in the health care sector need to keep their eyes on the road when it comes to autonomous cars.
- Is Modern Banking Actually Modern?: Box Co-founder and CEO Aaron Levie brought loads of energy to his presentation and delivered a sobering message to an audience of CEOs who are constantly trying to help their firms meet the rapidly evolving needs and wants of consumers. In short, Levie told them all, “Many aspects of modern financial services aren't modern. Processes need to change.” To drive home his point, Levie showed the audience a picture of the inside of a typical bank branch and then followed with a picture of the inside of the DMV. The similarity – and implied lack of appeal to customers - was striking.
- The Keys to Collaboration: A couple of the main stage presentations focused on how organizations large and small can improve internal and external collaboration. With so many small FinTech startups working with large firms, or going through the process of acquisition, the topics was incredibly relevant. Paypal CEO Dan Schulman said one key is making sure an initiative is a high enough priority for all parties. "Big companies are bad at hobbies. If a partnership doesn't touch a Top 5 priority for a firm, it will likely fail," Schulman explained. Yodlee CEO Anil Arora shared his perspective, noting that collaboration with financial services firms is hard because senior executives agree on big picture goals, but rank-and-file employees often remain stuck in old ways.
- Talent Development Means Nuturing the "Failures" and Risk-takers: LinkedIn CEO Jeff Weiner said it is critical for legacy companies to have and respect the "rulebreakers" in their ranks, otherwise creativity can evaporate. Vanessa Colella, Head of Citi Ventures and Citi's Chief Innovation Officer, said failure needs to be an accepted part of advancing a company's goals and too often personalities get in the way. "The key to learning from failure is to separate the idea from the person who conceived of it," Colella said.
- No Blockchainitis: As someone who has covered his fair share of conferences that address FinTech, I must confess that in the last couple of years I often leave with a wicked case of Blockchainitis. Whether it is a niche industry conference or a broader gathering of global thought leaders, everyone has blockchain on the brain. Kudos to the FinTech Ideas Festival for featuring the perfect amount of discussion about blockchain on the main stage, accompanied by more targeted breakout sessions (known here as Salon sessions). If Goldilocks had been in attendance, she would have said the amount of blockchain was “just right.”
The financial services sector must continue to work every day to not only shape the world for its customers, but also adapt to a world that is shaped by other industries. Events like the FinTech Ideas Festival will pave the way for greater collaboration across industries as all companies - big and small, Fin and Tech - work to continually re-invent the world in which we live.