Once again this year, Money 20/20 Europe hosted one of the largest fintech events in the region, gathering the global fintech and financial services industry to discuss the future of banking and address the industry’s most urgent topics.

This year’s event brought together more than 6,000 attendees from over 2,000 companies and 82 countries to cover hot topics including open banking and cybersecurity.

At the Swiss Pavilion, exhibitors included SIX, the financial services provider of Switzerland’s financial center, ARCATrust, a data security company, CustoDigit, which provides a solution for the custody of digital assets, OneVisage, a cybersecurity company, Tradeplus24, an alternative finance startup, and Vlot, an insurtech startup.

Open banking

This year, open banking was one of the main topics as it remains at the top of the agenda for fintech firms across the globe. With initiatives sprouting across Europe, US regulators are looking to catch up and planning on ways to get ahead of competition.

But open banking and open data raise serious concerns over cybersecurity. On this issue, artificial intelligence (AI) and machine learning (ML) are most likely to be the solution and these technologies are being increasingly applied to fraud and financial crime, among other areas.

This narrative seems to echo a recent report by Refinitiv, which indicated that 82% of investment into AI and ML are geared towards risk avoidance.

Improved customer experience

Asia, a fragmented market, has surpassed Europe’s innovation forecasts. In particular, as online and offline commerce are converging, Asia is leading the way.

“Cards and phones are taking over payments and non-cash transactions are growing at a faster rate than ever before,” Peggy Alford, senior vice president of core markets at PayPal, quoted by Finextra. Alford added that customer experience is now the lifeblood of the sector with even peer-to-peer becoming a new form of social commerce. “Social platforms are monetizing shopping and Asian giants are leveraging social presence,” she said.

In Europe, tailored apps and features are increasing in number, with users’ favorite brands all offering an app where they can browse, check orders and availability, while keeping a profile that holds data on their orders and behaviors.

For Pritesh Kotecha, senior vice president for Europe, the Middle East and Africa at SmartStream, a software and managed services provider, payments are not just a product, or technology, they are also behaviors by the user, particularly in the consumer world.

According to him, offering the most convenient products and services around consumer behavior, integrating payments within the users’ life, is the goal.

“Look at the Chinese model,” Kotecha said, quoted by Fintech Futures. “It’s about integrating financial services in those apps and products people already use: chats, games and so on.”

Among payment providers too, the key topic was front-end experiences and implementations of consumer experiences. In this field, Temenos is one of the enablers.

“We have seen a lot of banks approaching us – I’ve met with most of the big ones here, which is great,” Dharmesh Mistry, Temenos’ chief digital officer, told Fintech Futures. “I think word has spread, about our work with banks recently, and how we have helped them develop digital banking solutions that have proved agile and efficient.”

Kam Chana, senior digital strategist at Temenos, mentioned Praxia in Greece, Varo Money in the US, and Volt Bank in Australia.

The future of banking

For Mistry, the future of banking is indisputably digital, and those who specialize will have the best success.

Banks should focus on achieving the needed level of flexibility and adaptability to cater to a customer’s needs in real-time and concentrate on providing seamless services that support and enhance the customer’s life, Chana said. Most importantly, a bank should do so without the customer even realizing it, a concept referred to as “invisible banking.” AI and ML will play a big role in this, Chana said.

For Ralph Hamers, CEO at ING Group, the bank of the future is clearly purpose-driven. Hamers said that the primary need of customers is to buy groceries or to buy a house, and banks only support needs in a secondary way, offering customers a loan or telling them where to invest their money.

Hamers said that there are three crucial steps to creating the bank of the future: have your own platform, create independent platforms on top of that, and connect with other platforms.

A whole lot of buzzwords

David Brear, CEO of 11:FS, said that although financial institutions and fintech startups claim to be innovative, they are not delivering anything difference. “Digitization is being sold to people as the solution to fixing their problem,” Brear said. “Innovate is a dumb term. People do innovation for innovation’s sake. It is not about innovation, it’s about execution.”

Ruby Nimkar, principal at Greenhouse Capital, picked up on Brear’s point and said that innovation is quickly becoming an overused and distorted word as banks are rebranding themselves as technology company.

For Benoit Legrand, chief innovation officer at ING, “innovation is a mindset, not to promote yourself as an innovation manager but to bring value to the company by obsessing over the customer.”

“It’s important to connect to the environment, be open and put the customer at the center of everything,” Legrand said.

A panel of experts hosted by Ghela Boskovich, founder of FemTechGlobal and head of fintech and regtech partnerships at Rainmaking, a corporate innovation and venture development firm, discussed the many hyped up companies and technologies that have yet to yield returns.

They noted that the fintech industry may be too caught up with imagining eccentric solutions rather than actually finding plausible ways to execute it. In fact, innovation labs have proven repeatedly to not be as successful in coming up with real-world applications of technology.

The industry needs more people that are able to “get stuff done,” and fewer people buzzing out on technologies and ideas that are impossible to be put in practice, they said. The time to execute is now, the panel concluded.

“Innovation labs is an oxymoron” @prajitn is tasked with arguing why innovation labs should be banished. What do you think?#M2020EU #Money2020 pic.twitter.com/zYOCzPKLTz

— Money20/20 (@money2020) June 5, 2019

Watch out for the big techs

Brear warned banks that big techs are rapidly coming after them.

“Big techs continue to be a looming threat and never admit to being on the banking battlefield,” Brear said. “They have more customers and brands that people like. And it’s a killer when your customers don’t like you.”

Echoing Brear, Rishi Khosla, co-founder and CEO of UK-based digital bank OakNorth, told CNBC that big tech has always been a very strong contender to actually come in and now own parts of the financial services chain. He added that OakNorth is “in dialogue” with some tech companies over potential partnerships.

For fintech CEOs, big tech firms are well-positioned to win over users thanks to their already-massive platforms.

“We believe in the future whether it’s the bank of Facebook, bank of Amazon, bank of Google, they’re going to need to leverage that existing infrastructure,” said Jason Gardner, CEO of Marqeta, a US-based payments processor.

Some interesting examples of companies that presented at Money20/20 Europe this year included MyMy, a Shariah-compliant challenger bank for the Muslim populations in Indonesia and Malaysia, Pepper, the Israeli digital bank, and Danish Nets’ FacePay, a facial recognition payment technology.

Money20/20 Europe 2019 Day 1 highlights

Money20/20 Europe 2019 Day 2 highlights

Money20/20 Europe 2019 Day 3 highlights

Featured image: Money20/20 Europe 2019, Money2020, Facebook.