18 February 2019
Paris Fintech Forum 2019
Paris Fintech Forum 2019 took place on January 29 & 30 and for this 4th edition, we have entered into a new dimension of the Fintech world. In short : 2,600 attendees, 280 speakers mainly CEOs and managing directors of banks, regulators & insurance, more than 150 worldwide fintechs from all sectors, 150 keynotes, panels, interviews & pitches. And to conclude 4 awards granted by an international jury for the pitches by fintechs. And the last but not the least, a lunch dedicated to women in Fintechs to promote the gender equity also in a technologist world of API !
Really an amazing event in which Atos had a booth in collaboration with Google to show the demos from the Atos Global Fintech program to which equensworldline belongs as well. Platform was the key word of this event with a question: is platform the new black? Some fintechs position themselves as bridge between legacy and new platforms.
The diversity of the exhibitors among fintechs illustrates the challenge for incumbent to be active on all the sides of their business: fraud, onboarding of customers, lending, financing, payment, insurance, risk management, forex,…. The new technologies based on AI, blockchain, cloud, API make this revolution also a technical challenge. The bar to be credible in this innovative ecosystem is very high and fintechs talk directly to B2C and B2B companies, not only banks. This capacity to onboard all the stakeholders of the business is a new phase in this revolution.
About the awarded fintechs, the winners are : ZEGO, the best innovation; MAMBU, the best business model, FLUIDLY, the best pitch and KOOSMIK, the special price by the jury. Definitely all the 4 fintechs are disruptive in their approach. The power of data combined with advanced analytics enables to answer to consumer expectations through a frictionless customer journey as never seen.
About the capacity of funding this 4th industrial revolution, we can see that many sources exist and that it feeds up the ecosystem at all the levels: from new born fintechs to licornes raising several billion of euros. Just to illustrate in H1’18 investment in fintech companies in Europe hit $26 billion across 198 deals (vs $57.9 on a global scale across 875 deals). In the more mature areas of fintech, dominant market players were able to attract larger investment rounds, including challenger banks Revolut ($250 million) in the UK and N26 ($160 million) in Germany and peer-to-peer (P2P) payments firm Circle in the US ($110 million). Globally, there has also been an increasing emphasis on business-to-business (B2B) fintech solutions — as evidenced by the $250 million raise by Tradeshift.
Question on the table is “can we compared a company with a billion-market-capitalization and a start-up looking for its business model yet? The turnover between this ecosystem is also a reality and hundreds of small organisations may disappear despite huge investments. The challenge for beta banks for instance is to prove new business in a very short term for ROI.
Technology is ready but culture is holding innovation back. Banks are too siloed to directly integrate Fintechs. We are seeing much unsuccessful collaboration between banks and Fintechs as banks are killing innovation by trying to take control of them (heavy processes). Some incumbents have hundreds of partnerships but it takes a lot of efforts (and time) to plug in a Fintech into a 60 years old legacy system. Banks either have to become “FinTechs” themselves or to completely rely on FinTechs if they want to collaborate with them. Just one quotation about the global trends:”It’s difficult to convince incumbents – you have to show the real value of your offering and show them you deeply understand their need. You need to be credible and to change the historic culture.”
Regarding Open banking, banks need to open up and offer more than “financial services”. But banks are too focused on the traditional payment suite with no real value proposition for end-customers according to some observers. Not really “Open Banking” as they only open regulatory APIs for qualified TPPs. Besides banks usually don’t have the resources to think “platform first” and they are worried about cannibalizing their own business: the regulatory framework needs to evolve to encourage collaboration. PSD2 is going to destroy banks as they have to open their data to TPP but until now they do not benefit from the other way around.
Banks are pressured to deliver smooth onboarding while answering strict and containing AML regulations. So much money is spent on KYC/AML and it’s a regulatory investment with no ROI.
Frictions about digital identities are also critical because at the crossroad of security issue as well. No “portability” of identity from one bank to another makes mandatory to start all over again. In parallel most of the investments by banks in “Artificial Intelligence” are actually machine learning oriented fraud.
As a conclusion, may we remind the 3 pillars of the finance industry engaged in a digital transformation: responsibility, diversity, cooperation. Innovation can only subsist if we establish a constraining but open legal framework that is innovation-friendly but reassuring for end-customers. During the session with four European ministers of finance, it was reaffirmed the strong involvement of governments to boost Europe economy and countries attractivity.
To conclude action is now! Yes panels and discussions, but also urgent need to change the internal culture to convince new talents to join you! Because many talents met during this event. Impatient to discover the 5th edition!