Next Up: Next Bank Silicon Valley

By Grace Dinn

As part of our objective to keep you current on the latest banking products, services, and ideas, we’ve been in Silicon Valley all week—first at FinovateSpring, and now at the Next Bank conference.

Here the theme is reinventing finance through design, innovation, and entrepreneurship. The mission: to solve big problems by cultivating brand new ideas. The participants are here to connect and inspire one another.

We’re in a beautiful space with a great ambiance—a former Scottish Rites temple. This sets the stage for a community feel, creative thinking, and compelling conversations—both onstage and in the networking space—in a relaxed tech-casual environment.

Opening Keynote

Jim Marous of Financial Brand delivered a report on digital banking, starting with the question: Who are the top innovators? No surprises: the list comprised Uber, AirBnB, Amazon, Apple and Tesla. The most significant common denominator among these household names is their simplicity. Uber makes life simply convenient, and it’s shown it knows how to utilize the data it has on you to deliver a seamless customer experience, sometimes before you even realize. The newbie is AirBnB, which is shaking up the historically sound hotel industry. The biggest driver of its success is the social engagement piece. That is, people share where they stayed with pictures and feedback, optimizing social media—something financial institutions are still trying to master.

Then there is Amazon. I mean, where to begin? Drone delivery? Sometimes within 30 minutes?? Prime users get a special target planted in their backyard for the infamous brown box with black lettering to make its landing. Tesla has shaken things up because the biggest innovation within the company is not the car itself, but the experience and the digital integration. And of course, we can’t forget Apple.  An apple a day keeps the doctor away, and let’s be honest, most of us now surpass our eight servings of fruits before lunchtime (if we measure in terms of how many times we use our phone). The Apple experience is special because the physical support—that is, the stores—is consistent with the brand.

But we’re here for the banks. What can financial institutions take from these companies that have revolutionized the world as we know it? Here are nine goals for financial institutions:

  1. Customer-centricity
  2. Culture of innovation
  3. Data driven approach
  4. Contextual engagement
  5. Design that matters
  6. Digital-first builds
  7. Partnership with leaders
  8. Rethinking distribution
  9. Agility and flexibility

And most importantly, we were reminded that disruption = opportunity.

The Next Wave of Fintech Competition

 The first panel was moderated by Ron Shevlin of Cornerstone Advisors. He was joined by Pascal Bouvier of Santander InnoVentures, Dan Kimerling of Silicon Valley Bank, and Scarlett Sieber of BBVA. This panel was full of great dialogue around how fintech has developed over its three waves, and what is now coming down the pike in terms of banks + fintech. A lot of the conversation was around what BBVA is doing—they see themselves as part of the ecosystem, at the forefront of the charge of marrying banks and fintech companies. The industry has grown out of the idea-stealing phase and has embraced the spirit of collaboration. It is now at a point where platformification needs to take place. Banking is primed for this role, and should look at Amazon to see how that company functions as a platform.  Bottom line: it’s a good time to buy into fintech as friends, not foes.

Standouts for Finovate

This fireside chat, led by Jim Bruene of Finovate Group and Steve Ramirez of Beyond the Arc, capitalized on the timing of the conference. Because Next Bank is held on the heels of Finovate, it’s an opportunity for the bankers (plus some) who have spent the last 48 hours being awed at Finovate to chat about what it means for them.

This gave us an opportunity to review Finovate from Jim’s perspective. He shared a bit about the history, and the future of Finovate. Additionally, he shared, again, the six “Best of Show” winners and his thoughts on them. Quick recap of the six best in show: Banqu, Lending Robot, Payactiv, Quid, Salemove, and Silver6 took home the honors. (See ABA’s recap of the event in On the Floor at Finovate.)

Jim then shared how Finovate came to be. He is a self-proclaimed introvert who was working as a process engineer. He loved going to conferences, but thought the standard tradeshow floor process was not fully conducive to its goal. Thus the Finovate concept was born—as soon as the speakers are finished presenting, people can talk to them. Introverts and extroverts alike. With a fast-paced format, tons of information can be crammed in while still having ample time for networking. Finovate’s model has proven to be successful, so for the time being, why fix something that isn’t broken? Looking forward to what comes out of Finovate moving forward.

Special Guest

Presenting on Hong Kong’s emergence as a fintech capital was James Lau, Undersecretary for Financial Services and the Treasury of the Hong Kong SAR Government.

As Asia continues to be a driver of global innovation and economic growth, how can fintech companies navigate these new markets? Hong Kong is a strong financial center that has noticed a shift of more entrepreneurs from America and Europe moving into the evolving space. Hong Kong is becoming a one-stop-shop for fintech, embracing the value of collaboration and encouraging adoption. Hong Kong is also super connected with the second highest bandwidth power. And it has also grown into a regulatory sandbox that encourages development. There are just tons of people in Hong Kong, driving an economy that’s poised and ready to embrace fintech.

Guy Mounier, CustomerMatrix

Guy discussed how user experience and data will be the drivers of future innovations because tech is going to become commoditized. The fintech space, it seems, is getting a little crowded. So, what will matter down the stretch is having good data and using said data to enhance the customer experience. Hot trends coming down the pike include blockchain/disrupted ledger, machine learning for big data, onboarding/know-your-customer, compliance/regtech, and obviously, security.

Grace Dinn is a marketer in ABA’s Professional Development Group. Email: mailto:gdinn@aba.com. Twitter.

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