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Do You See Disruption Or Opportunity?

The one constant over the past two days at Finovate is incremental change. Outside of the PrivatBank topless ATM demo (easily one of the top five demos in the seven year history of Finovate), much of what we’ve seen is an incremental improvement of services, selective disruption and movement toward bank-like services through new form factors and non-bank service providers. All of these efforts - from the clean interfaces of FinBuddy and SaveUp, automation of advice in Yseop, to the ongoing focus of the securitization of transactions with companies like Encap - are collectively moving financial services forward. 

As we have seen at Finovate the past few years, the financial services landscape is changing rapidly. The complexity behind the scenes is increasing while the client-facing transparency and engagement is increasing. Customer behavior and expectations are shifting. Technology is accelerating this shift as it alters traditional relationships with our customers as well as the banking industry's historical sources of revenue, growth, retention and customer loyalty. This is why Finovate exists - to act as a backdrop to the movement of trends impacting the industry, providing a pause to reflect on incremental development in the fintech space. And to inspire. 

While we may not all agree on the impact, the shift to digital, as seen here at Finovate, has significant consequences. The banking model is moving toward a truly contextual, customer-centric view. We’ve seen less intrusive authentication, social connectivity and crowdsourcing, hyper-personalization of everything from interface to core banking functions like saving, as well as tailored assistance and support at critical moments (switching from English to Spanish voice interaction and then moving to text in the same customer interaction - how does this not impress?). We are now face-to-face with an engaged customer base that expects a completely frictionless experience.

Finovate presenting companies see that the future of financial services will be won by removing traditional barriers and rapidly embracing the shift in consumer and business behavior. It's clear that we are moving toward an era of engagement banking – a marketing, sales and service model that deploys technology to achieve customer intimacy at scale. As we move into this new era, the idea of profiting from glaring areas of friction disappears. 

The crux of the disruption argument is that banks are being disintermediated. But in many ways the industry is responding by either reverse engineering the attacks to its foundation or looking at Finovate companies and investing, partnering, and progressing. We’re seeing more players in the industry focused on stripping out complexity, driving services to APIs (the financial services revolution may not be televised, but it will certainly be driven by APIs. Beyond that, I love that services like Qapital are driving consumer applications and positive financial activities like savings and goal setting through personal visualizations and if then, then that service logic.   

As much of traditional banking services become a utility, those that leverage personalized banking experiences for their profitable customer niche segments will thrive. As we move further into digital experience, the next decade will be even more incredibly disruptive than what we saw in the recent economic downturn. Indeed, there will be blood.  

We are moving away from a banking relationship defined by the goal of being a customer's primary financial institution to one where we focus on becoming their primary financial application. It's no longer about wallet share. It's about app-driven mindshare – as our customers reach into their pockets for their mobile device or use their glasses or other form of wearable technology and think about their financial relationship choices – before, during and after a financial moment of truth. Let's continue to climb that money summit. 

Thanks for joining us at Finovate. 

Topics: Technology