6 Innovation Ideas for 2017 and Beyond
What’s keeping bankers awake at night in 2017 – and what’s helping them leap out of bed in the morning, ready to help make customers’ financial dreams come true?
We got a glimpse of this at Bank Innovation 2017, our invite-only event in Silicon Valley earlier this month. (If you missed the action and are interested to see the flow of ideas/snark on Twitter, check out the hashtag #gofintech.)
From banks’ battle/lovefest with fintech startups to chatbots to blockchain, here are some innovation ideas to chew on as spring arrives (at least in theory – brrr!).
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Banks Will Win Over Tech Giants
Fintechs that (still) look to disrupt banks won’t succeed. Facebooks and Googles of the world can get into payments all they want, but banks will, eventually, come out on top of tech giants in the battle for customer experiences.
That’s according to Fiserv CEO Jeff Yabuki, who added that banks will need allies in this battle, which represents a huge opportunity for fintech startups.
One area in which banks could (to this day) use some fintech help is payments. “The fact that I can take a nap and still stop an ACH payment is telling,” Yabuki said.
The idea that fintechs no longer compete with banks echoed throughout the conference. According to Adam Carson, head of digital partnership at JPMorgan Chase, many of the fintechs have shifted “back to the Fiserv model, which is “‘we have no intention of competing with JPMorgan, we are a next-generation software company looking to sell and power,’” he said. This, in turn, has made banks and large FIs more open to partnerships.
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IoT for Consumer Acquisition
When it comes to customer engagement, mobile has offered an unparalleled opportunity when done correctly, and this is something companies hope to replicate with the Internet of Things. At this point, the IoT is best defined alongside wearables, the majority of which are smartwatches and rings (and smartglasses may be coming back into fashion as well.) Engaging customers is an important step for any new technology, right after acquiring them in the first place.
After the initial first rush of enthusiasm, which faded quite a while ago, having mobile capability is no longer enough on its own to draw customers, which is why many FIs need to push further, according to Bank of America’s EJ Achtner, during a panel at Bank Innovation:
In any mobile experience, consumers expect personalization and rewards: Segment of 1 @EJ_Achtner#GOFintech #mobilepayments @BankInnovation
— Theo (@psb_dc) March 7, 2017
Offering this type of personalization seems like a challenge the IoT is suited for, as many smart watches and rings tie themselves to the individual user’s biometrics or device behavior–which can to a certain extent be replicated on mobile. Rewards are a little trickier for both technologies, and it might be ideal for companies to study the one shining example of a mobile or IoT rewards program: Starbucks.
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Facebook is Not a Bank, but it Might be a Fintech
Don’t worry everyone, Facebook won’t be opening up a bank for its 1.9 billion+ userbase. But it will be getting deeper into the payments game.
The social media giant is aiming to leverage the existing banking infrastructure, by enabling faster payments through partners, instead of trying to replace the existing channels, according to Kahina Van Dyke, global director of commerce and payment partnerships at Facebook.
“Facebook has no interest in becoming a bank,” she said, adding that the company does not even view payments as a revenue play for the business – merely as a channel for advertising revenue, as well as to increase time on the site.
“The only people that want to become banks are people who haven’t been bankers” Words of wisdom from @kahinavandyke @facebook #GoFintech
— Jane Barratt (@Jane_Barratt) March 7, 2017
This is not to say that the company can’t (or won’t) change its mind at any time. Facebook has, in fact, already secured a payments license in Europe.
Whatever the use case is, the payments tech should be used to enable faster payments for everyone, according to Van Dyke.
“I see a world where people can send money in the blink of an eye, to anyone – anyone – in the world, safely, no matter who they are,” Van Dyke said. The goal starts with the billion or so Messenger users, she added.
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